California wildfire smoke damage and recovery legislation

California has moved to establish new legal standards for wildfire smoke damage and insurance remediation following the January 2025 Los Angeles County fires, specifically the Eaton and Palisades fires. The fires, which destroyed over 16,000 structures, led to an estimated 13,000 smoke-damage claims involving contaminants such as lead and asbestos.

Initially, the state considered two legislative measures, Assembly Bill 1642 and Assembly Bill 1795, to address home safety and insurance disputes. Following the governor's signature, these bills have been enacted into law. Under the new regulations, the Department of Toxic Substances Control is tasked with creating standards for testing, repairing, and removing lead and asbestos by the end of 2028, with further contaminant standards due by 2029. Additionally, the law establishes a legal presumption that smoke damage in designated fire zones originated from the wildfire, requiring insurance companies to cover testing and remediation costs.

To further support recovery, Governor Gavin Newsom signed additional legislation to expand mortgage relief. Assembly Bill 1847 extends mortgage forbearance for up to 24 months for Los Angeles County homeowners facing hardship due to uninhabitable properties, while Assembly Bill 1842 establishes a permanent statewide program providing up to 12 months of relief for victims of federally declared emergencies. Furthermore, a new $100 million state-funded Disaster Reconstruction Assistance Program has been launched to assist low-to-moderate income households by bridging the gap between insurance payouts and actual rebuilding costs.