California's new Smoke Damage Recovery Act rewrites how insurers must handle wildfire smoke claims on residential properties that survived a blaze.
Governor Gavin Newsom signed AB 1795, authored by Assemblymember Mike Gipson (D-Carson), on September 15, 2026, chaptering it as Chapter 240 of the Statutes of 2026. The law overhauls insurer obligations on smoke damage to homes left contaminated by ash, soot, and combustion byproducts.
At its heart is a rebuttable presumption: if wildfire smoke, ash, soot, char, or combustion byproducts are found in a surviving home within the wildfire impact zone - any ZIP code within or partially within the fire perimeter - the damage is presumed to have come from that fire. Insurers who disagree bear the burden of rebutting it.
The law sets hard deadlines. An insurer that inspects has 30 calendar days from claim notice, or 30 days from when access is granted if government restrictions apply. After inspection, 30 days to pay the actual cash value of undisputed costs to restore personal property to preloss condition. For the dwelling, replacement cost is due within 30 days of completed restoration. Late payments accrue interest.
Insurers cannot terminate additional living expense coverage until the home has been restored and cleared for human occupancy under health-based standards developed through companion bill AB 1642, authored by Assemblymember John Harabedian (D-Pasadena) and signed the same day. AB 1795 becomes operative only once AB 1642 takes effect - a condition now met.
Carriers also cover the cost of sampling and testing needed to restore a property and clear it for occupancy. Once a home passes clearance, any subsequent recontamination is treated as a new claim with a fresh deductible - giving carriers finality while keeping the pressure on getting the initial remediation right.
By July 1, 2029, the Department of Insurance must develop training and certification programs for insurance adjusters and public adjusters working smoke damage claims. Adjusters without the required credentials cannot handle these claims. The Division of Occupational Safety and Health must separately propose worker safety regulations for remediation employees by the same date.
The law also mandates two government studies prompted by the Lineage Logistics warehouse fire in Boyle Heights, Los Angeles, which broke out on June 17, 2026. The cold storage facility held more than 85 million pounds of food that decomposed after the blaze. Because no mandatory evacuation was ordered, most residential policies did not cover temporary living expenses. The Department of Insurance must report on those coverage gaps by December 1, 2027.
For claims teams and carriers writing residential property in California: update claims protocols, adjuster pipelines, and ALE reserves before January 1, 2027.
The information in this article is based on publicly available legislative documents and does not constitute legal advice. Insurance professionals should consult the full text of the enacted statute and seek qualified legal counsel regarding compliance obligations.
