Homeowners sue California FAIR Plan, claim it's not paying for home cleanups after wildfires

LOS ANGELES (KABC) -- If you drive around Altadena or Pacific Palisades, you'll likely see crews cleaning up homes that survived the January wildfires. Some homeowners, however, say they haven't been able to clean up.

"The reason that we can't move back into our house is because California FAIR Plan is just, like, giving us a total runaround," said Saul Kerpelman, whose Pacific Palisades home survived the fire, even as others around him were destroyed.

Now, he worries about the smoke and soot, and said he's been dealing with the FAIR Plan for months.

"The FAIR Plan stance is that our house is dirty, and that there's not fire damage," said Kerpelman. "That when all this toxic stuff is sucked into the house, that it's just that made our house dirty, and we should be willing to just go back in there and live in that place."

The FAIR Plan is the insurer of last resort when other companies will not write you a fire policy. Now, there is a lawsuit filed by a number of survivors who claim the FAIR Plan is not being fair paying out victims.

"The FAIR Plan's position is that houses that did not burn to the ground are not damaged, they're dirty, and they're telling people who have profoundly contaminated houses to clean them themselves, which is not safe for the residents," explained Dylan Schaffer, one of the attorneys involved in the lawsuit.

Elizabeth Carlton is also dealing with the same issue with her home in Altadena.

"We have smoke damage. The winds were quite high, so there was ash that blew into our home that we had tested and it did have lead in it, so it's all been very disruptive," she said.

Schaffer said in many cases, you would need to go into the home with professional crews to remove the contaminants.

"In some cases, that requires removing building components, like insulation and ducting, which can be expensive," he said.

The homeowners involved in the lawsuit said it's not just about the money, it's about changing the way the FAIR Plan and other insurance companies deal with these claims.

"We never thought we'd have to use this, but it's clear that it's a necessity, and we need to have coverage moving forward," said Carlton.

Eyewitness News reached out to California FAIR Plan, which issued the following statement:

"While the California FAIR Plan cannot comment on ongoing litigation, we can share the following information on how the FAIR Plan handles smoke claims.

The FAIR Plan pays all covered claims, including smoke claims, consistent with California law and its policy forms, which are approved by the California Department of Insurance. The FAIR Plan's current dwelling policy has been in use since 2017.

Our policy and approach to direct physical loss is consistent with other insurers. Our policy, like many others, requires direct physical loss for there to be coverage.

The FAIR Plan expects its independent adjusters to make recommendations based on what they perceive at a loss location in accordance with the California Unfair Practices Act, the Fair Claims Settlement Practices Regulations and all laws relating to property and casualty insurance claims handling. If the adjuster recommends testing or treatment, the cost for testing would be paid for by the FAIR Plan, and if remediation is appropriate, the treatment would be included in the policyholders' covered claim."