Fire victims with smoke, chemical damage not covered by CA insurers
SAN FRANCISCO (KGO) -- High levels of harmful chemicals like arsenic and lead are being reported all over the areas destroyed by the Los Angeles County wildfires. It's raising questions about another hurdle in the state's insurance crisis.
Whether it's toxic chemicals or severe smoke damage -- the state's insurer of last resort, the California Fair Plan is denying claims to help with remediation. And the reason why may surprise you.
As the Pacific Palisades fire ripped through Travis Landrum's neighborhood, his first home purchase was filled with family memories that became covered in thick smoke. His home is one of the few that narrowly avoided the flames.
"So, my house is still standing. The house directly behind our property... that house burned down," said Landrum.
Landrum was feeling lucky at the time. Little did he know the nightmare he would walk into.
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"The back of my house kind of melted... the windows are melted, the stucco is messed up, the roof, the gutter, everything in my backyard burned," said Landrum.
His landscaping fried, the trampoline cooked, and inside, soot and ash covering the floors.
According to his insurer, the California FAIR Plan, smoke damage is only covered if it's a "direct physical loss," meaning it's visible to the unaided eye or detectable by smell.
Yet, despite clear evidence his home was affected, the FAIR Plan didn't think so.
"When it got to dealing with the structure of the house, they send you a portion of your policy... There's a line item in the policy that says, 'Smoke damage - Here's what we cover!' Then it's immediately, 'We don't cover smoke damage,'" said Landrum.
So, what did he get instead?
"So basically, all they provide you is a couple hundred dollars for hydroxyl... which is, I don't even know what that is. I've never heard of it," said Landrum.
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Hydroxyl is a chemical that's supposed to get rid of the smoke smell. And the FAIR Plan sent Landrum a list of 13 tasks to complete. But there's a catch - Landrum was only issued an allowance for a technician to clean all the toxins off his property within one hour.
"I can't believe they're telling people one hour -- that's crazy," said Dr. Gina Solomon, chief of Occupational Environmental Medicine at UCSF.
7 On Your Side brought the list the FAIR Plan sent to Landrum to Dr. Solomon, who has three decades of experience studying toxic chemicals, including in the aftermath of the Paradise Camp Fire and Hurricane Katrina.
Dr. Solomon says she found several flaws in the FAIR Plan's approach to clean out the smoke damage and toxic chemicals - adding it should take many hours to several days to do so properly.
"One of the things that I see that worries me, which is a, what they call a 'solid odor counteract.' And that's basically just like spraying deodorant over toxic chemicals. So that's not going to do anything to help anybody," said Dr. Solomon.
Landrum got professional estimates to clean and remove debris as well as take care of fire retardant, mold, soot, ash, and smoke on his property. It would cost him roughly $70,000. Yet, after his deductible, the FAIR Plan adjusters only offered him $625.
"Is that a joke? Like it's not even, I mean it's, it's just offensive," said Landrum.
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And to add insult to injury, Landrum adds, "We have elevated levels of lead in the house."
Turns out Landrum isn't alone.
"Six billion pounds of toxic material was released when it came to these fires, and 10,000 structures were in the fire zone that remain. Those structures are contaminated with toxic materials," said attorney Bryan Aylstock.
Aylstock represents hundreds of homeowners affected by the Palisades fires, where he says testing found toxins like lead and arsenic were 22 times above the Environmental Protection Agency's limit. In Altadena, he says more than half the homes tested had "exceedingly high levels of lead."
"There is no safe limit when it comes to children and lead... These homes are simply uninhabitable. And unfortunately, insurance companies aren't stepping up to the plate. They're using technicalities to say, 'No, we're not going to pay for remediation,'" said Aylstock.
Last month, California Insurance Commissioner Ricardo Lara issued a bulletin directing all insurers - including the FAIR Plan - to properly cover smoke damage claims. But the bulletin appears to just list legal obligations and guidance on best practices.
And, some, like Travis Landrum, are finding it's not working nor being enforced.
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"When you think about, you know, my daughter and my son who have to go back to their bedrooms and put their head on a pillow that could contain toxic lead... I can't live with that," said Landrum.
According to initial research from the California Institute of Technology, homes that were properly cleaned had toxic levels reduced by 100-fold. As Dr. Solomon explained, the cleaning does work. But in some cases, the study found the toxic waste was still prevalent even after cleaning. Aylstock warns that some homes will still have to be torn down.
This isn't the first time the FAIR Plan's actions have been scrutinized.
According to an investigatory hearing, a conduct exam released in 2022 revealed the FAIR Plan allegedly made dishonest and misleading responses during the regulatory phase, which was ultimately approved by the California Department of Insurance.
"Certainly the FAIR Plan should be held accountable for this behavior - regardless of how they snuck illegal changes through the regulatory process," said Doug Heller, Director of the Consumer Federation of America, during a 2022 investigatory hearing on the FAIR Plan.
Heller added the 2022 conduct exam also revealed "a stunning lack of transparency" and raised concern about the coverage of smoke damage.
"It's larger than just the FAIR Plan... the Department of Insurance cannot be so forgiving and trusting of carriers in the regulatory process," said Heller. "The sheer volume of consumer rights violations is staggering and deeply troubling."
Take a look at more stories and videos by 7 On Your Side.
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