7 On Your Side Investigates: Fire victims suing California FAIR plan, saying smoke damage isn’t being covered

ALTADENA, Calif. (KABC) — It’s been nearly nine months since the January wildfires, and hundreds of homeowners still aren’t seeing a path to recovery.

Many homeowners on the California FAIR Plan, the insurer of last resort for fire coverage, are especially frustrated.

Some policy holders whose homes are still intact but suffered damaged and were contaminated by smoke are seeing their claims being denied.

They feel the FAIR Plan is acting in bad faith.

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Many of those homeowners who were insured thought their policies would help them get back on their feet and back into the homes they owned.

7 On Your Side Investigates met with Lily Caffey, whose home in the Pacific Palisades is still standing, but she’ll only step inside if she wears protective gear from head to toe.

Walking through her front door is like stepping back in time.

“Seeing everything is … it still feels like it was yesterday,” she said.

She also hasn’t been touching or taking anything.

“You can see here where it shattered and all of the debris that came in,” she said as she walked us through her home. She said toxic ash from the fire blew in the night of the fire.

Testing that was paid for by Caffey’s attorney shows that in her living room, the smoke impact was listed as “severe” with “elevated levels of Mercury, Arsenic…(and) Chromium”

So Caffey believes nearly everything, including her favorite photo of her and her mom, whom she shares the home with, is a loss.

But in June, the California FAIR Plan sent them a letter saying, “The field adjuster did not observe any permanent damage resulting from smoke, ash or soot to the interior of your home.”

“It just feels, for a lack of a better word, disrespectful,” said Caffey.

She and her mom hired attorney Derek Chaiken, who’s fighting to get the Fair Plan to fully cover the cost of decontaminating and repairing the home.

“California FAIR Plan has done its best to make smoke seem like it’s some other type of loss and not caused by fire,” he said.

“Any penny that you get out of them, you have to fight tooth and nail for,” said Scott Jungwirth, who has already taken the step of suing the FAIR Plan for “bad faith” and “breach of contract.”

He won’t even go in his still-standing home because in his lawsuit, he says inside the home are “heavy metals, lead and cyanide.”

When you walk down Jungwirth’s street, however, everything looks pristine. There’s no ash, no charring, no signs that the Palisades Fire burned so close nearby.

When you look at his home, it looks like it’s in perfect shape from the outside, but he says it is so contaminated, it needs to be torn down, all the way to the studs.

“They offered us about, I think, less than $10,000 to make necessary repairs to the house, which is, it’s kind of, well, it is insufficient,” said Jungwirth.

It is the worst malice by an insurance company that I’ve seen in my 20-year career.

Dylan Schaffer represents the Jungwirth family and said hundreds of others in the burn zones who have smoke damage are not being covered by their fire policy with the FAIR Plan.

“The damage was not caused by smoke. The damage was caused by fire. Smoke is a component of fire,” said Schaffer.

But until the FAIR Plan fully agrees with that – many who thought they were the lucky ones with four falls and a roof still intact are still are out of their homes.

“It’s still very difficult, because I know I can’t just go and crawl into my bed, you know?” said Caffey. “I feel like sometimes, a little girl comes out of me where it’s like, I just want to go to my room.”

7 On Your Side Investigates reached out to the FAIR Plan and a spokesperson said it cannot comment on individual claims.

But we were sent a statement that read in part, “The FAIR Plan has been working with the California Department of Insurance over the past year to update and clarify its policy language around smoke damage, so the language reflects the manner in which these claims are being adjusted… Our goal is and continues to be to provide reasonable coverage …”

Just a few weeks ago, Gov. Gavin Newsom sent a letter to the FAIR Plan, calling its handling of smoke claims “unfair.”

That came after a Los Angeles County Superior Court judge has ruled the FAIR Plan violates state law for how it has been covering smoke damage.

Meantime, the state’s Department of Insurance tells 7 On Your Side Investigates it has received more than 100 complaints against the FAIR Plan.

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