Episode 38. LA Wildfires: Smoke, Ash, and Soot Damage

In our discussions of the LA wildfires, we’ve talked a lot about homes that were destroyed by burning. But what about those impacted by smoke and ash? This week, Bob discusses Gharibian vs. Wawanesa Gen. Ins. Company, a recent case addressing this issue, and how to stand the best chance of being compensated for potential damage from smoke, ash, and soot.

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Transcript

So far in our series on the Los Angeles fires of 2025, we have mentioned structures

damaged or destroyed by burning. But what about properties that have not been burned,

but have been exposed to soot, ash, and smoke? Is there coverage under the standard

form homeowner's policy for them? In Gharibian vs. Wawanesa Gen. Ins.

Company, case number B325859 in the second appellate district,

a decision that was issued on February 7th, 2025. The court addressed this question

and found there was no coverage. Here are the facts. Plaintiffs owned a house in

Cronaut Hills. On October 10, 2019, the Saddle Ridge wildfire burned to within a

half a mile of plaintiff's property. Plaintiff's property did not suffer any burn

damage, but smoke, soot, and ash got into and on the home and in the swimming

pool. At the time, plaintiffs had a homeowner's policy that covered,

quote, "direct physical loss to property," end quote, subject to a $2 ,000 deductible.

plaintiffs hired a lawyer to report a claim to the insurer. The insurer began an

investigation subject to reservation of rights, hiring pro -clean to inspect the

property and to estimate the cost of thoroughly cleaning it and its contents.

ProClean provided its estimate and was willing to do the work for $4 ,308 .90.

Plaintiffs then hired an industrial hygienist to inspect the property.

The hygienist reported the following. Soot and ash were present at the property.

Soot by itself does not physically damage a structure. Ash creates physical damage to

a structure only if it is left on metal or vinyl and is then exposed to water.

There was no evidence of rusting metal or oxidized vinyl. There was no burn or heat

damage to the property. And the home could be fully cleaned by wiping the surfaces,

HEPA vacuuming and power washing the outside.

In response to the plaintiff's industrial hygienist, the insurer hired its own

industrial hygienist who disputed the need to clean the HVAC system but otherwise

agreed with plaintiff's experts findings.

The insurer then paid the plaintiffs $2 ,308 .90.

That was the difference between the purell clean estimate and the plaintiff's $2 ,000

deductible. Instead of hiring purell clean, plaintiffs clean the interior and exterior

of the home including the pool on their own. As a result of their activities,

they were not aware of any visible wildfire debris that remained outside or inside

their home, and they were not aware of any part of the property that was physically

damaged.

plaintiffs then retained a company called the Croisdale Group, Inc., to estimate the

cost of cleaning the house. Croisdale provided an estimate of $35 ,553 .10,

which included general cleaning, as well as interior painting,

exterior wood and stucco painting, replacement of attic insulation,

unspecified swimming pool work, and HVAC cleaning.

The insurer hired an independent adjusting firm who went out to the property with

ProClean, inspected the property, looked at the additional items that Croisdale had

listed on its estimate, and ProClean provided its own estimate to include all of the

disputed cleaning services that Croisdale had included. PuroClean's new estimate was

$20 ,718 .09, about $15 ,000 less than Croisdale's estimate.

The difference appears to be that Croisdale was not going to perform the work and

PuroClean was willing to perform all of the work in the Croisdale scope of work for

the $20 ,000 figure.

The insurer then issued a supplemental payment to the plaintiffs in the amount of

$16 ,409 .19. That was the difference between the new PuroClean estimate and the prior

payment the insurer had made to plaintiffs less than deductible. The insurer also

asked plaintiffs to provide an estimate or invoices for pool cleaning.

Plaintiffs did not provide any of that information. Nevertheless, the insurer paid

plaintiffs an additional $2 ,400 for pool cleaning, which was the Croy'sdale estimate.

So where are we at this point in the case? Well, no one has identified direct

physical loss to the plaintiff's house. The plaintiffs have cleaned the interior and

exterior of the house, including the pool themselves.

And the insurer has paid plaintiffs $21 $118 .09,

which is more than the amount PuraClean was willing to charge for the complete

cleaning scope of work and less than the Croisdale estimate.

Under these circumstances, plaintiffs, jointly with unrelated homeowners making a

similar claim against the same insurer sued the insurer for breach of contract and

bad faith. The insurer moved for summary judgment that there was no coverage because

there was no evidence of direct physical loss to the homes. The trial court agreed

and the appeal followed.

According to the court of appeal, the homeowners had the burden of showing there was

a direct physical loss to property and to find that term under California law as a

distinct demonstrable physical alteration to the property. Plaintiffs failed to meet

this burden because, according to the court, all evidence indicated that the debris

was easily cleaned or removed from the property.

One lesson from this opinion for policy holders is that you have to address the

issues under the policy in order beginning with the coverage grant. In coverage

counsel is in episodes 7 and 8, I talked in detail about doing this and I

recommend that you re -listen to those episodes because this is a critical lesson to

understand in coverage analysis and coverage litigation.

Homeowners complaining of soot, the smell of smoke, ash,

or other fire -related debris from the Los Angeles Fires in 2025 may

make claims for the cleanup of those items. But,

if there is no direct physical loss to their property, the insurance company may not

have any obligation to pay those expenses. To prove a claim for coverage and to

obtain benefits under the policy, homeowners should look for some sort of burn damage

or heat damage to their properties. The kind of thing that homeowners and their

homeowners insurers should look for in terms of heat damage are deterioration or

structural weakening of a building's materials caused by prolonged exposure to extreme

temperatures. These could be manifest in things like cracking,

warping, fading paint, expansion and contraction of materials,

and potential damage to the foundation because of soil shrinkage.

All of this could impact the building's integrity and functionality and could qualify

as a distinct demonstrable physical alteration to the property, satisfying the policies

and coverage grant of direct physical injury to property.

When exposed to high heat, building materials like metal, concrete, and wood can

expand and then contract when temperatures drop, leading to cracks and stress points

over time. Extreme heat can cause roof shingles to blister,

crack, and deteriorate, potentially leading to leaks. Signing paint and trim can fade,

crack, and warp because of high temperatures.

Excessive heat can also affect interior finishes like wood flooring, causing warping

and gaps. During the adjustment process, the policyholder and insurer will need

qualified inspectors to evaluate each of these things.

A cursory inspection will not aid anyone. It would be well for the insurer at least

to specifically ask its expert to address each of these issues. And to also ask the

homeowners for photographs showing the before and after conditions which can help

detect things like fading that might otherwise not be obvious.

As devastating as the 2025 Los Angeles fires have been,

it's not just those whose buildings have been destroyed who are impacted,

but there may be other homeowners out there who have less severe and may be more

difficult to detect damage to their properties that may be covered.

However, just cleaning is not going to be a direct physical loss to the property

and people in those situations should not be making an insurance claim,

at least under the holding of the Garibian case. There's also a lesson here for

policyholder lawyers who may be tempted to overreach in their claims.

Certainly having an expert provide a scope of repair for interior and exterior

painting where there has been no deterioration of the painting and simply a claim of

a now dissipated smell of smoke and a speculative possibility that the cleaning

process could deteriorate finishes is not going to be enough. Well,

thank you for listening to this episode of Coverage Council is in. Until next week,

this is Bob Salander signing off. Goodbye.