‘It's dangerous’: A California family’s house is badly damaged after the 2024 wildfires — but their insurer won't pay for cleanup because of a technicality. How to handle denied claims

"The FAIR Plan simply did not conduct an adequate investigation and told them that they should clean the home themselves and move back in," said Dylan Schaffer, the couple's attorney with Kerley Schaffer, LLP. “And that advice is not only contrary to California law, it's dangerous.”

Couple takes legal action

With their insurance claims rejected, Yates and Proctor are now suing the California FAIR Plan Association and the insurance companies that fund it.

The FAIR Plan, which stands for Fair Access to Insurance Requirements, is California's fire insurance backstop — designed for homeowners and businesses in high-risk areas that can’t get traditional insurance coverage. It’s made up of multiple insurers who are legally required to participate and offer minimal coverage for fire-related damage.

According to the couple's lawsuit, the FAIR Plan denied the couple's smoke damage claim on the basis that their home wasn’t “damaged” but simply “dirty.” That’s been a long-standing point of contention in wildfire insurance cases across the state.

“The problem with the FAIR Plan,” Schaffer told CBS reporters, “is that their view — since 2012 and across thousands of wildfire claims — is that these houses are not damaged. They’re dirty. And because insurance policies cover damage, not dirt, they don’t want to pay to fix them.”

Yates and Proctor are asking for reimbursement for smoke remediation and reconstruction work they say is necessary to make the home safe again, potentially starting from the studs. The California Department of Insurance declined to comment on the lawsuit specifically but said it expects insurers to stand by their policyholders.

The FAIR Plan has come under scrutiny in recent years as wildfires grow more intense and widespread. While it serves as a last resort for many homeowners in fire-prone areas, critics say the coverage is often too limited, and the plan is even at risk of running out of money.

How to navigate insurance disputes

Wildfires, hurricanes and floods can leave lasting damage to your home, even when the walls are still standing. If your insurer denies a claim after such an event, don’t assume the story ends there. Here are some steps homeowners can take to protect themselves before and after a natural disaster.

Make sure you understand your coverage

Before disaster strikes, review your homeowner's insurance policy closely. Make sure it includes coverage for fire, smoke and additional living expenses if your home becomes uninhabitable. In high-risk areas, supplemental policies may be needed to cover losses not included in basic plans, such as fire and flooding.

Document all damages

As soon as it’s safe to return, take photos and videos of everything — inside and out — and keep records of any professional assessments, such as air quality tests or contractor quotes, that show the extent of the damage.

Consider working with a public adjuster

Public adjusters work on your behalf (not the insurance company’s) to assess damage and negotiate claims. They charge a fee — often a percentage of your settlement — but can help maximize your payout.

Get legal help

If you believe your claim has been unfairly denied, an attorney with experience in insurance disputes can advise you on next steps. In California, insurers are required by law to act in good faith and handle claims fairly. Denying a legitimate claim without a proper investigation may be grounds for legal action.

As climate change increases the frequency and intensity of natural disasters, having the right insurance coverage isn’t optional — it’s essential. If you live in a high-risk area, talk with your agent about specific protections for wildfires, floods, earthquakes and temporary housing. The right type of coverage could make all the difference when facing the aftermath of a natural disaster.