Notice Re Additional Living Expense Coverage When Homes are Uninhabitable as a Result of 2025 Los Angeles Wildfires

RICARDO LARA

CALIFORNIA INSURANCE COMMISSIONER

CALIFORNIA DEPARTMENT OF INSURANCE

PROTECT • PREVENT • PRESERVE

300 Capitol Mall, 17th Floor

Sacramento, California 95814

(916) 492-3500

NOTICE

TO:

All Admitted and Non-Admitted Residential Property Insurance

Companies Handling Consumer Claims Resulting from Recent

Southern California Wildfires

FROM:

Insurance Commissioner Ricardo Lara

DATE:

February 14, 2025

RE:

Additional Living Expense Coverage When Homes are

Uninhabitable as a Result of 2025 Los Angeles Wildfires

As Insurance Commissioner, my top priority is ensuring that wildfire survivors affected

by the devastating Palisades, Eaton, and other windstorm-created fires in the Southern

California region receive the insurance benefits they are entitled to – and that they

receive them as soon as possible. This also includes consumers having on-going

insurance coverage when they need it the most, including Additional Living Expenses

coverage (also known as Loss of Use and Fair Rental Value), especially when it

impacts their health and safety.

According to the Los Angeles County Department of Public Health (County Public

Health), the fire debris and ash that resulted from these fires may contain asbestos,

heavy metals, chemicals, and other hazardous substances. The fire debris and ash also

pose significant threats to public health through inhalation of dust particles and

contamination of drinking water. The improper handling of fire debris and ash can

expose residents to toxic materials and can spread hazardous substances throughout

the community.

On January 10, 2025, the Los Angeles County Health Officer declared a local health

emergency for Los Angeles County, citing hazardous conditions including, but not

limited to, burned or heat-damaged hazardous materials, fire debris, and ash within the

Palisades and Eaton Fires burn areas

h can

expose residents to toxic materials and can spread hazardous substances throughout

the community.

On January 10, 2025, the Los Angeles County Health Officer declared a local health

emergency for Los Angeles County, citing hazardous conditions including, but not

limited to, burned or heat-damaged hazardous materials, fire debris, and ash within the

Palisades and Eaton Fires burn areas.

On January 15, 2025, the Los Angeles County Health Officer issued an Order that

prohibits the clean up and removal of fire debris until hazardous materials inspections

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are conducted, citing the potential for widespread toxic exposures and threats to public

health. The Order also noted that exposure to these hazardous substances may lead to

acute and chronic health effects and may cause long-term public health impacts.

County Public Health also advised that, if Phase 1 and 2 of the fire debris removal and

cleanup have not been completed, the area remains hazardous due to unstable

structures, sharp metal, and ash with potentially toxic substances. County Public Health

further explained that fire debris, soot, and ash contain harmful substances like dioxins,

polycyclic aromatic hydrocarbons, and heavy metals that can lead to a range of shortterm and long-term medical conditions.

In addition, “Do Not Drink Notices” are still in effect in some areas impacted by these

fires. I also understand that power is not completely restored in some locations.

Most recently, on February 11, 2025, County Public Health further refined its prior

advisories with a stronger Public Health Advisory to residents near the Palisades Fire

and Eaton Fire burn areas. This new advisory reminds residents about the dangers

associated with fire debris for individuals residing within 250 yards of a burned structure

or parcel within or near the Palisades and Eaton burn areas

cently, on February 11, 2025, County Public Health further refined its prior

advisories with a stronger Public Health Advisory to residents near the Palisades Fire

and Eaton Fire burn areas. This new advisory reminds residents about the dangers

associated with fire debris for individuals residing within 250 yards of a burned structure

or parcel within or near the Palisades and Eaton burn areas. This advisory stated that

residents in these areas may face an increased risk of exposure to hazardous

substances from ash, soot, and fire debris before the completion of Phase 1 (hazardous

materials removal) and Phase 2 (fire debris removal). Exposure to these materials may

lead to physical health symptoms and may pose long-term health impacts.

County Public Health also noted that fire debris from burned structures can contain a

variety of harmful substances, including:

•

Asbestos from older building materials

•

Heavy metals like lead

•

Hazardous chemicals from household products

•

Fine particulate matter created by the fire

Strong winds and weather fluctuations may increase both the exposure risk and the

affected distance.

In response to the Camp Fire in Paradise in 2018, where power, water, and sewer

services were down which rendered many homes uninhabitable, I was proud to sponsor

SB 872 (Dodd, Chapter 261, Statutes of 2020) in 2020 that expanded “Additional Living

Expenses” to situations where a home is uninhabitable due to a covered peril, such as a

wildfire.

California Insurance Code section 2060[b][2] states in pertinent part:

“A policy that provides coverage for additional living expenses subject to this

subdivision shall not limit the policyholder’s right to recovery if the insured home

is rendered uninhabitable by a covered peril. However, an insurer may, in lieu of

making living expense payments required by this subdivision, provide a

reasonable alternative remedy that addresses the property condition that

precludes reasonable habitation of the insured premises...”

penses subject to this

subdivision shall not limit the policyholder’s right to recovery if the insured home

is rendered uninhabitable by a covered peril. However, an insurer may, in lieu of

making living expense payments required by this subdivision, provide a

reasonable alternative remedy that addresses the property condition that

precludes reasonable habitation of the insured premises...”

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Whether a residence is uninhabitable is not limited to situations where power, water, or

sewer systems are disrupted. A residence may be deemed uninhabitable due to health

and safety reasons, such as those described above by County Public Health.

My Department is directly hearing from policyholders and local elected leaders, among

other sources, that some insurance companies are advising certain claimants that their

Additional Living Expenses coverage (also known as “Loss of Use” and “Fair Rental

Value”) is being terminated. As a result of the conditions described above, including the

ongoing risks associated with the hazardous waste and upcoming Los Angeles County

General Wildfire Debris Removal Program, this Notice is advising all admitted and nonadmitted insurance companies of their requirement to exercise due diligence in

determining whether a home is habitable or uninhabitable. The fact that an area is now

accessible does not automatically mean the residences in those areas are habitable,

especially given the on-going health and safety reasons as those described above by

County Public Health.

If a neighborhood or specific home is deemed uninhabitable, I expect all insurance

companies to continue providing Additional Living Expenses coverage until the home is

deemed habitable, subject to applicable statutory timeframes and any policy limits that

may exist. Further, as long as the County’s Public Health Advisory remains in effect,

policyholders in the impacted areas should continue to receive Additional Living

Expenses benefits unless the policyholder chooses to inhabit their residence

providing Additional Living Expenses coverage until the home is

deemed habitable, subject to applicable statutory timeframes and any policy limits that

may exist. Further, as long as the County’s Public Health Advisory remains in effect,

policyholders in the impacted areas should continue to receive Additional Living

Expenses benefits unless the policyholder chooses to inhabit their residence.

Any insurance company with questions about this Notice, please contact:

Janet An, Attorney

Consumer Law Unit

Janet.An@insurance.ca.gov

If a policyholder has questions on their wildfire claim, please contact your insurance

company or adjuster directly. If there are still questions or concerns after contacting the

insurance company, then please contact my Department directly by calling our toll‐free

Hotline at (800) 927‐4357 or visit us online at www.insurance.ca.gov.