Smoke Damage: Covered by Your Insurance?

Smoke, soot and ash cause extensive damage every year, but will your insurer cover it?

Does your commercial property policy or homeowners insurance policy cover smoke damage? Smoke damage  can trigger epic battles with insurers as illustrated by the recent decision of the Eight Circuit Court of Appeals in Maxus Metropolitan LLC v. Travelers Property Casualty Co., in which the Court upheld a $27 million verdict against Travelers for its refusal to pay for soot damage. The dispute centered around portions of an apartment complex that had not been directly burned by fire, but which had been penetrated by smoke. In that case, the Eight Circuit ruled that an insurance policy that covered damage for “direct physical loss” must pay for soot damage as long as the soot damage possessed (1) the required degree of “physicality”  i.e. a physical alteration, contamination, or destruction and (2)  rendered the property unsafe or uninhabitable. 2025 WL 2473486 at **4-5 (8^th Cir. Aug. 28, 2025).

This clear standard helps policyholders. As Chip Merlin pointed out in a recent blog post about this decision, Travelers and other insurers have recently attempted to compare soot and smoke to Covid and argue that soot and smoke do not cause tangible damage. However, as the Maxus court pointed out, soot and smoke resemble asbestos, not Covid, and create a permanent hazard unless eliminated.

When a house burns, the paints, plastics, electronics, chemical treatments, and other man-made products burn with it. As a result, smoke and soot often contain heavy metals and other toxic compounds at unsafe levels—levels known to cause cancer and other illness. This scenario has been made clear by the L.A. Wildfires and the number of smoke claims arising out of them. A good article in Claims Journal discusses the work being done in connection with the L.A. Wildfires to test for dangerous compounds and the challenges in testing and cleaning. This work will inform testing in the future and hopefully help policyholders prove the presence of physical damage from smoke.

Interestingly, the article paraphrases an Insurance Industry spokesperson who admits that smoke damage usually should be covered by a property policy but then points to lack of clarity in testing standards:

Karen Collins, an executive with the American Property Casualty Insurance Association, said in an email that home insurers are usually responsible for remediation when smoke contamination has clearly damaged the property and that professional testing may be covered when needed to assess physical damage. But the lack of standardized protocols for wildfire smoke testing and remediation has given rise to inconsistent practices and disagreements about the need and scope of testing, she added.

Fortunately, standards are being developed and testing is evolving. Recently, the Rocky Mountain Association of Public Adjusters published guidelines it developed for smoke testing complete with a chart indicating dangerous compounds and levels of those compounds. In addition, the Maxus court pointed to the work of consultant, Forensic Building Sciences, and pointed to their testing and analysis over seventeen times in the course of the opinion, and the work they did to establish the presence of smoke and soot. 

These sources point toward the need for property owners with smoke damage to hire policyholder lawyers who are well-versed in this developing area of law and to hire the correct experts to identify and then prove the presence of smoke damage. At Johnstone Trial Law, we stay on top of the latest developments and only represent policyholders. We help policyholders recover for smoke and fire damage when insurers don’t want to pay. Contact us if you need help.