The January 2025 wildfires in California left widespread damage in their wake, prompting both public outcry and governmental response. In the aftermath, significant changes have emerged that impact homeowners and businesses filing insurance claims. Two major developments have drawn attention: a judicial ruling concerning the California FAIR Plan and the introduction of Assembly Bill 597 (AB 597). These changes are reshaping how claims processing works, especially in fire-prone regions.
FAIR Plan Ruling Brings Changes to Smoke Damage Coverage
On June 25, 2025, a Superior Court judge in Los Angeles County issued a ruling that the California FAIR Plan was not meeting state coverage requirements for smoke damage. The court found that the plan’s policy of only covering smoke damage that was visible or detectable by smell did not comply with the legal standard that mandates full fire loss coverage. As a result, the FAIR Plan must now recognize smoke damage proven through lab testing, not just what can be seen or smelled.
Following this ruling, the FAIR Plan Association indicated it would revise its internal guidelines and work with the California Department of Insurance to update its policy language. These changes are expected to shift how claims processing is handled for smoke-related property damage, opening the door for broader compensation.
Understanding AB 597 and Its Impact on Claims Processing
Assembly Bill 597 is currently under consideration in California and is designed to regulate public adjuster contracts and fees in disaster situations. If passed, the bill would require all public adjusters to use a state-approved written agreement that outlines the scope of their services and the details of each claim.
The bill also includes a cap on the fees that public adjusters can charge during declared catastrophes, limiting those fees to 15 percent of any new funds recovered that were not already paid by the insurer before the adjuster’s involvement. Additionally, the bill would prohibit public adjusters from soliciting business immediately after a disaster and would give consumers easier options to cancel agreements.
Supporters of the bill argue it promotes transparency and consumer protection. However, a large consensus, especially with warnings from recent wildfire victims, is that it may discourage qualified professionals from helping clients mid-claim, especially in complicated or delayed cases. This could reduce access to experienced representation at a time when many policyholders need help the most. This is particularly alarming in cases involving fire and smoke damage, where proper documentation and skilled negotiation can make all the difference in securing a fair outcome.
Broader Context: The Rights of the Insured
These developments, both the FAIR Plan ruling and the proposal of AB 597, reflect a broader debate over how to balance consumer protection with the realities of disaster recovery. As natural disasters like wildfires increase in severity and frequency, many policyholders find themselves caught between underwritten insurance policies and complex claims processing procedures.
The recent fire season has made it clear that many homeowners and business owners feel underserved by current systems. The FAIR Plan decision highlights the need for clear and fair coverage terms, while AB 597 underscores growing legislative interest in regulating third-party involvement in the claims process.
What Homeowners and Businesses Can Do
The changes stemming from the FAIR Plan ruling offer hope for more equitable outcomes. But AB 597 threatens to undo that progress by limiting access to the very experts who help policyholders navigate complex claims. If you believe in protecting your right to fair representation, here’s how you can help stop AB 597:
1. Contact Assemblymember Harabedian and Urge Him to Withdraw AB 597
Assemblymember Harabedian authored AB 597. Call or email his office and respectfully express your concerns. Let him know this bill will hurt homeowners, wildfire survivors, and others who rely on professional help during difficult insurance claims.
Call (916) 319-2041 or use the message form at noAB597.com to send your message.
2. Spread the Word
Visit noAB597.com and share the facts. The site includes downloadable materials, talking points, and real testimonials from wildfire survivors who oppose this bill. Post on social media, email your community groups, and make your voice heard.
3. Find and Contact Your California Senator
This bill still has to pass the Senate. Use the official California Legislature tool to locate your senator and urge them to vote NO on AB 597.
What Starts in California Won’t Stay in California
The FAIR Plan ruling is a clear win, expanding smoke damage coverage and holding insurers accountable. But AB 597 threatens to undo that progress. If passed, it would restrict when and how public adjusters can help, limiting access to experts when policyholders need them most.
And it will not stop with California. Other disaster-prone states like Oregon, Washington, Colorado, Arizona, Nevada, and Texas are watching closely. Weakening consumer protections here could set a dangerous national precedent.
Navigating claims after a disaster is already tough. AB 597 would make it even harder. But with the right information and expert support, homeowners and businesses can make smarter decisions and fight for the recovery they deserve.
SunPoint Public Adjusters, Inc. Advocates Only for the Insured’s Benefit
SunPoint Public Adjusters, Inc. (“SunPoint”) is the “Gold Standard” of the Public Adjusting industry. We comprehensively review and evaluate your insurance settlement, immediately deploy a team of specialists to assess and quantify your damages, and customize a strategy around your recovery.
Our in-house experts and external veteran professionals are experienced in quantifying and negotiating building, personal property, inventory, or other additional coverages. We work solely on your behalf to resolve your claim favorably. Our team ensures your insurance company does not delay, diminish, or deny benefits rightfully owed to you. Industry authorities agree that having a public adjuster like SunPoint on your side early in the process expedites and maximizes your recovery.
Policyholders have been benefiting from our knowledge and advocacy for decades. We have handled, managed, and successfully navigated claims ranging from homeowner losses to corporate losses in the hundreds of millions of dollars, disaster losses involving government entities and entire municipalities, agricultural and recall losses, and virtually any type of disaster claim that could be imagined.
Our team of Public Adjusters, building cost consultants, inventory specialists, forensic accountants, and equipment consultants is unmatched in our industry. It’s easy to be big, but being the best requires daily dedication—and we have that dedication, with a goal that’s perfectly aligned with yours.