California FAIR Plan found not fair to homeowners forced to use its 'insurance'
Judge deems California FAIR Plan illegal
A Los Angeles Superior Court judge has ruled that the California FAIR plans smoke damage policy directly violates state law by denying coverage for cleanup and remediation. A very expensive benefit the Fair plan is obligated to render. Thousands of Fair plans insured will receive it and will likely face a tidal wave of lawsuits for past denials.
LOS ANGELES - A Los Angeles Superior Court judge ruled that the California FAIR Plan’s smoke-damage policy directly violates state law by denying coverage for clean-up and remediatons, a very expensive benefit FAIR Plan is obliged to render.
Now, thousands of those insured by the FAIR Plan will receive it and will likely face a tidal wave of lawsuits for past denials. This has been going on for years, decades in fact, and the insurance industry-run plan was aided and abetted by the Department of Insurance.
With hoses, Etta and her son, saved their Altadena home in January's wildfire. But the winds blew thick smoke, ash and debris inside. That smoke often fills homes with all manner of lung-damaging particulates as well as blood and brain-threatening toxins.
Etta, saying she was too unkempt from cleaning up her home for months, chose not appear on camera but tells her story of the California FAIR Plan's illegal unfairness.
"I was looking at something like $80,000 to a hundred grand to remediate my home. Even though the hygienist report said that your home is filled with lead and should be remediated by a professional company, two days later I got the denial in writing," said Etta.
Family and friends put on hazmat protection, have been working for months washing, scrubbing, scouring, painting, not knowing if the toxins will be gone.
"Unlawfully denying claims for smoke damage, denying them, delaying them, reducing them, lowballing these claims," said Harvey Rosenfield, founder Consumer WatchDog and author of Proposition 103.
The FAIR Plan has been caught at it many times.
"Every insurance company has to follow the guidelines. Right? And, the FAIR Plan just doesn't seem to do it. For some reason, the FAIR Plan just thumbs their nose at the department and did nothing," said independent insurance agent Karl Susman.
This time the court did.
"Horrible heavy metals: by dioxins, by asbestos by lead, by beryllium, by lithium," said Oakland homeowners attorney Dylan Schaffer, who won the L.A. case and many others.
"California FAIR plan has denied thousands of claims and underpaid many more," said attorney Schaffer.
Incredibly, the insurance industry runs California FAIR Plan and often gets customers from the very people they canceled or non-renewed, favoring the ones they kept.
"You could be a State Farm customer next door to a FAIR Plan customer. The State Farm customer gets the remediation and moves back in and the FAIR plan customers get nothing," said Shaffer.
It's completely unfair. The California insurance companies wanted to reduce their exposure to California and this is the way they got it done. They basically didn't renew us and, this was their way to avoid having to pay for the larger expenses," said Etta.
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