AB1795 - Smoke Damage Recovery Act.

Enrolled September 04, 2026 Passed IN Senate August 31, 2026 Passed IN Assembly August 31, 2026 Amended IN Senate August 28, 2026 Amended IN Senate July 02, 2026 Amended IN Assembly May 18, 2026 Amended IN Assembly April 27, 2026 Amended IN Assembly April 16, 2026 Amended IN Assembly April 07, 2026 Amended IN Assembly March 16, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Assembly Bill No. 1795 Introduced by Assembly Member Gipson February 10, 2026 An act to add Article 2.5 (commencing with Section 25544) to Chapter 6.95 of Division 20 of the Health and Safety Code, to add Sections 2060.1, 2060.2, 14048, and 15009.2 to the Insurance Code, and to add Section 6713 to the Labor Code, relating to smoke damage. LEGISLATIVE COUNSEL'S DIGEST AB 1795, Gipson. Smoke Damage Recovery Act. (1) Existing law generally regulates classes of insurance, including fire and residential property insurance. Existing law specifies the measure of indemnity under an open fire insurance policy that requires payment of actual cash value or replacement cost. If there is a covered loss relating to a state of emergency, existing law requires additional living expense coverage to be for a period of no less than 24 months from the inception of the loss. This bill, the Smoke Damage Recovery Act, would create a rebuttable presumption that if wildfire smoke, ash, soot, char, or combustion byproducts are present in a surviving residential property in the wildfire impact zone after a wildfire, then smoke damage in the property is the result of that wildfire. The bill would prohibit an insurer from terminating additional living expenses coverage for a residential property insurance smoke damage claim for a property within the wildfire impact zone until the property has been restored to preloss condition and cleared for human occupancy, as specified. The bill would require specified regulations and guidance to apply to these claims within the wildfire impact zone. The bill would make an insurer responsible for the cost of sampling and testing that is necessary to restore a damaged property to its preloss condition and render it cleared for human occupancy. If a residential property has been cleared for human occupancy, the bill would require a claim for recontamination to be considered a new claim. The bill would require an insurer that chooses to exercise its right to inspect a smoke-damaged property to inspect the property as soon as practicable, but no later than 30 calendar days after receiving notice of the claim or, if applicable, no later than 30 calendar days after access to the property is granted. The bill would require the insurer to pay the actual cash value of the cost to restore the damaged personal property to its preloss condition no later than 30 calendar days after the inspection, unless the policyholder has agreed to restoration by the insurer. For damaged residential property, the bill would also require the insurer to pay the undisputed amount of replacement cost, up to the applicable policy limits, within 30 calendar days from the date the restoration is completed, unless the policyholder has agreed to restoration by the insurer. For a portion of a smoke damage claim pertaining to the replacement of covered personal property, the bill would require the insurer to pay the undisputed amount of the replacement cost of the personal property within 30 days from the date the insurer was provided with a receipt for purchase of the replaced personal property. This bill would require the Department of Insurance, in coordination with others, to conduct a study on or before July 1, 2027, that, among other things, identifies the gaps in insurance coverage exposed by the Lineage Logistics (Lineage) warehouse fire in the Boyle Heights community in the City of Los Angeles, which broke out on June 17, 2026, including additional living expense coverage and business interruption coverage in the absence of a mandatory evacuation order triggering the coverage. The bill would require the department, on or before December 1, 2027, to submit a final written report detailing the findings and recommendations of the study to the Governor and Legislature, and would require the study to be posted on the department’s public internet website. (2) Existing law, the Insurance Adjuster Act, generally regulates the licensing of insurance adjusters. Existing law, the Public Insurance Adjusters Act, generally regulates the licensing of insurance adjusters. The acts set forth various requirements with respect to operation as an insurance adjuster or public insurance adjuster. This bill would require the Department of Insurance to develop training and certification programs for insurance adjusters and public insurance adjusters in inspecting, evaluating, sampling, or testing smoke damage caused by a wildfire involving residential properties. The bill would require an insurer, adjuster firm, or qualified manager to train and accredit its adjusters in accordance with specified regulations and guidance, and would require a public insurance adjuster hired by an insured to adjust smoke damage claims to have the requisite license, training, and certification. (3) Existing law establishes the Division of Occupational Safety and Health and the Occupational Safety and Health Standards Board within the Department of Industrial Relations and sets forth their powers and duties relating to the adoption of health and safety standards for workers. This bill would require the Division of Occupational Safety, on or before July 1, 2029, to propose to the Occupational Safety and Health Standards Board regulations to protect the health and safety of employees performing work on residential properties that have sustained smoke or fire damage as a result of a wildfire. The bill would require the regulations to include requirements for the certification of individuals who perform that work and would authorize the regulations to establish fees for certification, which would be deposited into the newly created Wildfire Remediation and Restoration Certification and Training Fund for use, upon appropriation by the Legislature, to cover the costs of administering and enforcing the related requirements and regulations. (4) Existing law establishes the Office of Emergency Services within the office of the Governor, and sets forth its powers and duties, including responsibility for addressing natural, technological, or manmade disasters and emergencies, including activities necessary to prevent, respond to, recover from, and mitigate the effects of emergencies and disasters to people and property. Existing law also requires the California Environmental Protection Agency, in consultation with the Office of Environmental Health Hazard Assessment, to, among other things, determine which specified extremely hazardous substances pose a regulated substances accident risk, as specified. This bill would require, on or before December 31, 2027, the Office of Emergency Services, in consultation with the California Environmental Protection Agency, to coordinate with state and local agencies and other entities, as necessary, to conduct a study that, among other things, identifies the various entities involved in the Lineage fire incident response and recovery operations, the coordination of entities involved in the incident response and recovery operations, and the various jurisdictional oversight authorities, as specified. The bill would require the state and local agencies to provide the Office of Emergency Services and the California Environmental Protection Agency with any requested assistance. The bill would require the Office of Emergency Services, on or before July 31, 2028, to submit a final written report detailing the findings and recommendations of the study to the Governor and Legislature, and would require the study to be posted on the office’s public internet website. Because the bill would require local agencies to provide specified information to state agencies, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. (5) This bill would the operation of its provisions contingent upon the enactment of AB 1642 of the 2025–26 Regular Session. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. This act shall be known, and may be cited, as the Smoke Damage Recovery Act. SEC. 2. (a) The Legislature finds and declares all of the following: (1) California has experienced recordbreaking wildfires in recent years, including the Eaton Fire and Palisades Fire in January 2025 that damaged and destroyed thousands of homes and businesses. In addition to completely destroyed homes, condominiums, and apartments, thousands of residential properties suffered damage as a result of smoke, soot, char, ash, and other contaminants. (2) Thousands of smoke damage insurance claims have been filed as a result of these fires. The lack of universally recognized and regulatory standards for the testing, evaluation, remediation, and restoration of smoke damage has prompted complaints from survivors that their insurance companies have completely or partially denied their smoke damage claims or have refused to conduct, or reimburse for, preremediation testing or postremediation clearance testing to ensure their homes have been properly restored to preloss condition. (3) While the Department of Insurance has taken multiple executive actions to protect consumers, including issuing a bulletin to insurers reminding them of their duty to fully investigate smoke damage claims, initiating legal action against the California FAIR Plan over its failure to handle smoke damage claims within existing law, and investigating complaints from consumers, the lack of standards and unsettled case law have caused a patchwork of claims handling practices by insurance companies. (4) Smoke, soot, char, ash, and other contaminants that emanate from wildfires cause damage to properties by depositing particulate matter, gases, heavy metals, volatile organic compounds, and other pollutants onto personal property and into the walls, floors, ceilings, surfaces, and other infrastructure of a property. Those contaminants not only compromise the integrity of the premises, but they may also pose significant, long-term health issues long after the fire has been extinguished. (5) As property owners and tenants return to their properties and the areas that have been damaged or destroyed after a wildfire, many face uncertainty as to whether their properties have been properly remediated, restored to preloss condition, and are safe to inhabit. Property owners and tenants require assurances that their homes, other structures, and personal property, which have been impacted by contaminants, have been fully and fairly tested, have been restored to preloss condition, and are cleared for occupancy based on the minimum chemical screening levels to be established by the California Environmental Protection Agency. (6) It is in the best interest of Californians to protect the health and safety of residents by ensuring that their properties are returned to a safe and habitable condition after suffering damage from wildfires, including smoke damage. (7) While all property insurance policies that cover the peril of fire also cover smoke damage resulting from fire, the extent to which insurance companies are covering the remediation and restoration of properties has been inconsistent, and many residents are concerned that they will incur significant financial burden to remediate and restore their properties to preloss condition on their own. (8) While remediation of smoke and contaminant damage is made more challenging due to the varying severity of smoke inundation on the exterior and interior of properties, regulatory standards for the minimum sampling, testing, and chemical screening levels for residential properties that have sustained smoke damage as a result of a wildland-urban interface fire or urban conflagration are vitally needed so that the Department of Insurance is able to enforce insurance companies’ remediation and restoration obligations and so that residential properties are rendered safe and habitable and restored to preloss condition. (9) In response to the unprecedented damage caused by the January wildfires, in June 2025, Insurance Commissioner Ricardo Lara directed the Department of Insurance to lead a Smoke Claims and Remediation Task Force (Task Force), comprised of members representing consumers, public health, environmental health, fire safety, local governments, remediation and restoration specialists, industrial hygienists, and the insurance industry, to develop recommendations for uniform standards for the inspection, testing, and remediation of smoke damage in residential properties, and to determine the extent to which the remediation and restoration of those properties should be covered by residential property insurance policies. The Task Force met over several months in 2025 and has submitted its report of recommendations to the Insurance Commissioner. (b) It is the intent of the Legislature to set forth standards and requirements for the minimum sampling, testing, and chemical screening levels for residential properties that have sustained smoke damage as a result of a wildland-urban interface fire or urban conflagration to ensure the health and safety of residents and for the proper handling of residential property insurance claims resulting from those fires after consideration of the recommendations in the Task Force Report, as well as other relevant scientific and health-based sources. SEC. 3. Article 2.5 (commencing with Section 25544) is added to Chapter 6.95 of Division 20 of the Health and Safety Code, to read: Article 2.5. Environmental Hazard Studies 25544. (a) The Legislature finds and declares all of the following: (1) The Lineage Logistics (Lineage) warehouse fire in the Boyle Heights community in the City of Los Angeles, which broke out on June 17, 2026, has escalated into a prolonged, significant environmental and public health crisis. While the official cause of the fire is still under investigation, Lineage has reported that the fire started on the roof when a contractor of the owner of the solar array was testing the array. The fire involved a nearly 500,000 square foot commercial cold storage warehouse that reportedly contained refrigeration systems, rooftop solar panel infrastru [Text truncated for display. Full text available on Congress.gov.]