Homeowners reeling after being denied coverage for devastating reason: 'Committed to paying what we owe'

Homeowners whose houses survived the Eaton and Palisades wildfires in January are still unable to return home because of the extensive smoke damage to their properties. 

What's happening?

Los Angeles residents have begun to rebuild after wildfires have devastated neighborhoods such as Altadena and the Pacific Palisades. However, many have been left in limbo as insurance companies like State Farm and Allstate have delayed approving restoration and remediation costs. 

Smoke from the fires has left toxins lingering in the homes left standing. Many homeowners have already gotten estimates from remediation companies amounting to tens of thousands of dollars, according to NBC News, but they still have not gotten approval to begin repairs.

Rob Rhatt, an insurance analyst for Lending Tree, told NBC News that insurance companies often drag their feet on smoke damage claims because the damage is less visible and harder to determine.

Why are smoke damage repairs important?

Smoke inhalation can cause long-term lung damage, but the health effects of smoke damage are still not fully known. Smoke damage can leave harmful particles on the surfaces of a home, which may lead to negative impacts on a person's health. 

California wildfires continue to worsen due to dry conditions and a warming planet, which is worsened by the burning of dirty fuels. Smoke damage is one consequence of this devastating weather event, and insurance companies have been dropping or increasing rates for coverage as certain areas become higher risk.

As insurance companies delay or lowball payouts for home repairs, many homeowners remain in temporary housing due to toxic air pollutants from the smoke. The fates of their homes remain unclear, as they are unable to fix them.

What's being done about smoke damage repairs?

Insurance companies have said they are working on paying customers what they owe as promptly as possible.

State Farm told NBC News that it is "committed to paying what we owe, promptly, courteously, and efficiently." The company also told the outlet it received more than 11,750 fire and auto claims related to the fires and paid nearly $2.2 billion to customers as of Feb. 26. 

Allstate also told NBC News that it has paid more than $750 million to California customers since the fires started.

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The state of California has also requested that insurance providers that are members of the FAIR plan, which provides fire insurance to at-risk homeowners who cannot find coverage, contribute $1 billion to the fund.

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