Public adjusters, policyholders, and attorneys keep asking me about the recent California smoke damage case where the court held that the smoke damage was not covered under the policy. I wrote about that decision in California Wildfire Attorneys Consider Impact of New Smoke Caselaw. I noted:
The key takeaway from the case is that the mere presence of smoke, ash, or soot does not automatically qualify as property damage. The court emphasized that unless wildfire debris causes a lasting alteration to surfaces—such as corrosion or staining—insurers are not obligated to cover claims. The plaintiff policyholders in the case received compensation for cleaning services they never used and attempted to claim additional damages, but the court ruled in favor of the insurer, citing a lack of physical damage evidence.
The insurance industry recognizes that when smoke is present, it is significant and dangerous to occupants of a building. A Chubb publication, An Evaluation Procedure for Post-Fire Re-Occupancy in Commercial & Industrial Structures, highlights that post-fire smoke contamination is a serious hazard that should not be underestimated. Simply cleaning visible soot or airing out a building is not enough—proper evaluation, professional remediation, and clearance testing are critical to ensuring a safe re-occupancy.
Chubb warns that smoke from a fire can leave behind hazardous particulates and chemical contaminants that may pose serious health risks to employees and complicate the re-occupancy of a commercial or industrial facility. It recognizes that smoke and combustion byproducts contain a mix of toxic substances, including polycyclic aromatic hydrocarbons (PAHs), volatile organic compounds (VOCs), heavy metals, and fine particulate matter (char, soot, and ash). These substances can persist in the air and on surfaces long after the fire is extinguished, posing a danger to occupants of a building.
The Chubb study notes that smoke particles can travel beyond the visibly damaged areas, contaminating ventilation systems, office spaces, and production areas. These contaminants can be inhaled, absorbed through the skin, or ingested, leading to potential health effects, especially for employees with pre-existing respiratory or cardiac conditions. Smoke odors may signal the presence of lingering contaminants, even if no visible damage is apparent. However, the article notes that odor detection is subjective, meaning additional air and surface testing may be required to assess air quality.
The article highlights concerns for employees experiencing respiratory irritation, headaches, dizziness, or other health complaints following a fire event. Special attention should be given to vulnerable individuals, such as those with asthma, chronic lung disease, or compromised immune systems. Smoke particulates and chemical residues can infiltrate HVAC systems, ducts, and filters, redistributing harmful pollutants throughout the building. Proper inspection and cleaning of ventilation systems are essential to prevent ongoing exposure. Significantly, the Chubb paper noted that since smoke deposits can be invisible, air and surface sampling techniques should be used to determine the extent of contamination. Fire-related particulates, chemical residues, and gases must be tested to ensure the environment is safe before employees return.
The bottom line is that the insurance industry recognizes that smoke is a peril covered under the policy. Its presence is dangerous, and the industry has legions of discussions about how to remove it—all of which the insurance industry will pay for the reasonable costs to do so. The recent California smoke damage case is not such a landmark case on smoke damage but an example of bad facts being presented, leading to a poor ruling.
The California Department of Insurance recognized this bottom line regarding the smoke damage case and claims. I recently noted this in Los Angeles Wildfire Smoke Claims: What Homeowners Need to Know. I summarized the California bulletin on the topic with a simple takeaway:
The key takeaway is that ‘smoke’ is a named peril in the policy. Smoke claims are covered by property insurance policies if the presence is demonstrated.
The science of smoke damage being dangerous can easily be proven. The methods for remediation of smoke and the costs to do so can be proven. The primary proof is that it is from a fire or wildfire.
One of our California-based attorneys, Victor Jacobellis, wrote about proof of smoke damage issues previously, and before the recent smoke damage case was decided, in The Importance of Demonstrating that Damages Exist in Smoke Damage Insurance Claims. He wrote:
It is therefore critical to fully evaluate all entry paths and determine where CBPs could have settled. Insurance companies are notorious for ignoring attics, crawlspaces and garages, areas that often offer direct paths for smoke. Attics are an especially critical area because CBPs can distributed through a building in days and even months after a wildfire.
Smoke damage is real, and your property will require specialized cleaning. Remember, take steps to demonstrate there is smoke damage and never blindly rely on an insurer’s conclusions.
I will be visiting our California clients, public adjusters, and attorneys this week to discuss these issues. This blog post should clear up what I think about smoke damage claims.
Thought For The Day
“A great place is California. It is so big and so grand. It has the advantages of the future, yet holds the romance of the past.”
—Theodore Roosevelt
