California Law Strengthens Smoke Damage Insurance Claims
Governor Newsom signed a bill creating a legal presumption that smoke damage in wildfire zones is wildfire-related.
Updated on Oct. 5, 2026 in Insurance
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Governor Gavin Newsom has signed Assembly Bill 1795 to ensure that insurance providers cover smoke damage testing and remediation. The legislation establishes a legal presumption that smoke-related home damage within wildfire areas is linked to the wildfire event.
Why it matters
The law addresses significant gaps in consumer protection identified by the Smoke Claims and Remediation Task Force, which found many wildfire victims were denied coverage for smoke impacts. It also resolves disputes regarding insurance claims following industrial and wildfire smoke events in Los Angeles.
The legislation applies to fire events including the June 2026 warehouse fire in Boyle Heights, which impacted a 491,000-square-foot facility. Specific timelines for inspections and claim handling remain to be established by regulators.
The players
Gavin Newsom
He serves as the Governor of California and signed the legislation into law.
Mike Gipson
He is the California Assemblymember who authored Assembly Bill 1795.
California Department of Insurance
The state agency tasked with developing recommendations to strengthen property insurance consumer protections.
Smoke Claims and Remediation Task Force
The entity that investigated consumer coverage gaps regarding smoke damage claims.
The details
Assembly Bill 1795 mandates that insurers pay for necessary smoke testing and bars the termination of Additional Living Expense benefits until a home is deemed safe. The law also requires adjusters to receive specialized training and ensures repair estimates meet current health and safety standards.
Timeline
June 2026: Wildfires and a warehouse fire occurred in Los Angeles.
October 5, 2026: Governor Newsom signed Assembly Bill 1795 into law.
Market Dynamics
This legislation marks a departure from historical insurance practices in California by legally codifying the presumption of smoke damage causation. It establishes a new framework for how carriers must handle policyholder restoration obligations in the wake of disaster events.
Homeowners in wildfire-prone areas may now see more standardized claim processing and reduced out-of-pocket costs for smoke testing. The mandate ensures that Additional Living Expense coverage continues until a property is fully restored and safe for habitation.
The takeaway
Property owners should document smoke damage thoroughly and monitor new guidance from state regulators regarding inspection timelines. This law provides a stronger legal foundation for policyholders to contest insurance denials following fire-related events.
What happens next
The California Department of Insurance and CalOES are expected to develop new regulatory recommendations to further clarify the enforcement of these legislative changes.
Further reading
Learn more about local policies in our Insurance section.
Source note: This article includes information reported by Insurance Journal.
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