California Passes Nation’s First Insurance Requirements for Smoke Damage Claims

California Gov. Gavin Newsom signed into law a spate of bills to reform the state's wildfire insurance sector, after consumer fallout from the catastrophic Eaton and Palisades fires of early 2025.The four bills signed in Sacramento on Tuesday are aimed at adding consumer protections for wildfire survivors. The state's home insurance crisis is especially acute as thousands of homes are at high wildfire risk.Two of the bills aim to codify protections and remediation for smoke damage, and two more give wildfire survivors more leeway to seek mortgage forbearance on homes that are rendered uninhabitable by wildfires.Increasingly damaging wildfires have resulted in a fraught situation for California, where insurers paid over $22.4 billion in claims in 2024. The state is investigating two insurers, alleging they systematically delayed and underpaid claims. One of theme, State Farm, has called the state's insurance marketplace "dysfunctional.""We are continuing to listen, act, and stand alongside the families and communities rebuilding after the Eaton and Palisades fires," Newsom said at a press event. "These new protections will make insurer obligations clearer and give homeowners more fi...