The California FAIR Plan Association, which offers a last-resort insurance plan, is facing allegations of inadequate coverage for fire and smoke damage. A class action lawsuit filed against the association claims that policies sold by the FAIR Plan do not provide sufficient coverage for losses caused by fires and smoke.
The lawsuit, filed in Alameda County Superior Court on July 24, represents four California residents on behalf of 365,000 FAIR Plan policyholders. The plaintiffs are requesting that the association increase its fire coverage to comply with state law, which mandates coverage for all losses caused by fire with no exceptions.
Dylan L. Schaffer, the attorney representing the plaintiffs, pointed out that California law requires homeowner’s wildfire policies to cover all direct physical loss from fires and smoke. However, the FAIR Plan has only covered “permanent physical damage” under its wildfire policies since at least 2017, leaving many homeowners without adequate coverage for smoke damage.
Despite the invisible nature of smoke damage, it can cause significant harm to homes. For example, during the August Complex fire in 2020, a homeowner near Santa Cruz faced hundreds of thousands of dollars in damage from smoke absorption but was denied coverage by the FAIR Plan. This homeowner was forced to sell her home due to the toxins absorbed in her walls, while her neighbors received coverage for similar damage.
While the FAIR Plan declined to comment on the pending litigation, it was noted that under former Insurance Commissioner Dave Jones, the plan was allowed to maintain its requirement for “permanent physical damage.” However, current Commissioner Ricardo Lara has stated that losses by fire do not necessitate permanent physical changes to qualify for coverage.
Mr. Schaffer believes that Commissioner Lara’s findings support the illegality of the FAIR Plan’s policy and increase the likelihood of success for the class action lawsuit. He emphasized that no previous case in US history has recognized a separate peril for smoke damage, as claimed by the FAIR Plan.
The lawsuit does not seek damages for the plaintiffs’ lost insurance benefits but rather demands that the FAIR Plan expand its coverage to include fire and smoke damage in compliance with state law.
Could you please rewrite this paragraph for me?
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