Smoke Damage Recovery Act

Homeowners and tenants in wildfire impact zones gain clearer coverage and payment protections for smoke damage. The law also ties occupancy clearance and restoration to state standards and expands oversight of major smoke-related disasters.

What the law does ​

• Presumes wildfire-caused smoke damage when smoke, ash, soot, char, or combustion byproducts are found in a surviving home within a wildfire impact zone.
• Requires insurers to cover necessary sampling and testing, continue additional living-expense coverage until a home is restored and cleared for occupancy, subject to policy limits, and meet specified inspection and payment deadlines.
• Requires insurers to provide settlement estimates, allows policyholders to choose restoration contractors, and treats recontamination after clearance as a new claim with a new deductible.
• Requires the Department of Insurance to create wildfire-smoke training and certification programs for insurer and public insurance adjusters by July 1, 2029.
• Requires proposed worker-safety and certification rules for people performing wildfire smoke or fire remediation on homes by July 1, 2029.
• Requires state studies and public reports on insurance-coverage gaps and emergency-response failures exposed by the 2026 Lineage warehouse fire.

Who it affects ​

• Homeowners, renters, and residential property policyholders with covered wildfire smoke-damage claims in wildfire impact zones.
• Residential property insurers, insurance adjusters, public insurance adjusters, and restoration contractors.
• Employees performing smoke or fire remediation work on wildfire-damaged homes.

Context ​

The law becomes operative only if AB 1642 of the 2025–26 Regular Session is enacted and effective by January 1, 2027.

Breakdown ​

Wildfire Smoke Insurance Claims ​

The Smoke Damage Recovery Act sets new rules for residential insurance claims involving smoke damage in wildfire impact zones. It generally treats smoke-related contamination found after a wildfire as caused by that wildfire, requires insurers to keep living-expense coverage in place until the home is restored and safe to occupy, and sets deadlines for inspections and certain payments. It also requires a state study of insurance coverage gaps highlighted by the 2026 Lineage warehouse fire in Los Angeles.

Key takeaways

• Smoke, ash, soot, char, or combustion byproducts found in a surviving home in a wildfire impact zone are presumed to have been caused by the wildfire unless shown otherwise.
• Insurers cannot end additional living-expense coverage for a qualifying smoke-damage claim until the home is restored to its preloss condition and cleared for human occupancy.
• Insurers must pay for sampling and testing needed to restore the property and make it safe for people to occupy.
• An insurer that elects to inspect a smoke-damaged property must do so within 30 calendar days after receiving the claim notice or, when necessary, after being given access to the property.
• The bill sets 30-day deadlines for insurers to pay certain undisputed amounts for restoring damaged personal property, completing residential-property restoration, and replacing covered personal property.
• The Department of Insurance must study coverage gaps exposed by the 2026 Lineage warehouse fire and submit a public report with findings and recommendations by December 1, 2027.

Smoke Damage Adjuster Training ​

The bill requires the Department of Insurance to create training and certification programs for insurance adjusters handling wildfire smoke damage at homes. Insurers, adjuster firms, and qualified managers must train and accredit their adjusters under the required standards. Public insurance adjusters hired by policyholders for these claims must hold the required license, training, and certification.

Key takeaways

• The Department of Insurance must develop training and certification programs for inspecting, evaluating, sampling, or testing wildfire smoke damage in residential properties.
• Insurers, adjuster firms, and qualified managers must train and accredit their adjusters under specified regulations and guidance.
• The requirements apply to adjusters handling smoke damage caused by a wildfire involving residential properties.
• A public insurance adjuster hired by a policyholder to handle a smoke damage claim must have the required license, training, and certification.

Wildfire Smoke-Damage Worker Protections ​

The bill requires the Division of Occupational Safety and Health to propose worker-safety rules by July 1, 2029, for employees working on homes damaged by wildfire smoke or fire. The rules must require certification for people doing this work and may impose certification fees. Fee revenue would go to a new fund to support administration and enforcement if the Legislature appropriates the money.

Key takeaways

• The Division of Occupational Safety and Health must propose regulations by July 1, 2029, to protect employees working on residential properties damaged by wildfire smoke or fire.
• The proposed regulations must include certification requirements for individuals performing wildfire smoke- or fire-damage work on homes.
• The regulations may establish fees for certification.
• Certification fees would be deposited into the new Wildfire Remediation and Restoration Certification and Training Fund.
• Money in the fund may be used, if appropriated by the Legislature, to administer and enforce the certification requirements and related regulations.

Lineage Fire Response Study ​

The bill requires the Office of Emergency Services, working with the California Environmental Protection Agency, to study how agencies and other entities handled the Lineage fire incident response and recovery. The study must identify the entities involved, how they coordinated, and which authorities oversaw their work. A public final report is due to the Governor and Legislature by July 31, 2028, and local agencies may be reimbursed if the state-required assistance creates eligible costs.

Key takeaways

• The Office of Emergency Services must complete the study by December 31, 2027.
• The study must identify response and recovery participants, their coordination, and the relevant oversight authorities.
• State and local agencies must provide requested assistance to the Office of Emergency Services and the California Environmental Protection Agency.
• The Office of Emergency Services must submit a written report with findings and recommendations to the Governor and Legislature by July 31, 2028.
• The study must be posted on the Office of Emergency Services' public website.
• If the Commission on State Mandates finds that the required local assistance creates reimbursable state-mandated costs, the state must reimburse those costs under existing procedures.

Link to AB 1642 ​

This part makes the Smoke Damage Recovery Act effective only if AB 1642 from the 2025–26 Regular Session is enacted. If AB 1642 is not enacted, these provisions do not take effect.

Key takeaways

• The bill’s provisions depend on AB 1642 being enacted during the 2025–26 Regular Session.
• The Smoke Damage Recovery Act provisions covered by this condition will not operate unless AB 1642 becomes law.