Smoke and Soot Are Covered Causes of Loss

The recent appellate decision in Maxus Metropolitan, LLC v. Travelers ¹ reinforces a critical coverage point for policyholders suffering wildfire smoke and soot claims.  Microscopic soot contamination can constitute “direct physical loss or damage” under property insurance policies. This appellate ruling largely upheld the $27 million verdict against Travelers, which had denied coverage for widespread remediation costs following a catastrophic apartment fire. I previously wrote about the trial court ruling and arguments made by Travelers in Travelers Guilty of Bad Faith and Loses $27 Million Verdict Over Smoke, Soot, and Ash Dispute.

The court confirmed that soot and combustion byproducts, unlike a virus that dissipates on its own, represent a permanent contaminant absent remediation. That distinction sets soot apart from COVID-19, the peril insurers have increasingly tried to analogize to smoke and ash damage in order to avoid coverage obligations.

Travelers had argued at trial and on appeal that microscopic soot infiltration could not meet the requirement of physical damage because it was invisible and did not structurally alter the buildings. The court rejected this argument, explaining that soot contamination, like asbestos, alters property conditions in a way that makes spaces uninhabitable unless remediated. The court emphasized that the record contained sufficient evidence for the jury to conclude that the soot rendered the property unusable without intervention. While one judge dissented in part, the majority affirmed that soot is not akin to an ephemeral condition, such as a virus, that can fade without treatment.

This case matters because insurance companies across the country are now attempting to draw parallels between soot and COVID-19 to escape liability. In wildfire-prone states like California, insurers have increasingly asserted that smoke and soot damage is not “physical loss” unless accompanied by visible destruction, citing pandemic-era rulings that virus particles do not alter property. Yet soot, unlike COVID, adheres to surfaces, infiltrates HVAC systems, and often requires extensive remediation to restore property to safe use. Courts, including the Eighth Circuit here, are recognizing this reality even as they acknowledge the unsettled debates that have emerged in the wake of COVID litigation.

The decision also highlights a related issue of insurer conduct. The jury found that Travelers’ investigation was inadequate and vexatious. Evidence showed that its inspectors chose sampling locations where soot was unlikely to be found and delayed disclosing expert findings while remediation decisions were being made. This aligns with concerns raised in other smoke claim disputes where insurers minimize or dismiss credible scientific evidence of contamination, leaving policyholders to shoulder remediation costs or face prolonged displacement. The Eighth Circuit agreed that the jury had a sufficient basis to find vexatious refusal under Missouri law.

Looking ahead, this ruling may impact litigation beyond Missouri. The NFL of wildfire and smoke litigation is not centered in Los Angeles. There are large-scale soot and smoke claims that are becoming a national coverage battleground. Insurers used to pay for these damages so long as they could be proven to exist. Insurers now continue pressing the COVID analogy to escape liability.

This appellate decision highlights a fundamental difference between the soot and COVID cases. Soot is tangible, persistent, and contaminates property in a way that cannot be ignored. Policyholders and insurers should take note. Courts are signaling that soot remains a covered peril, and attempts to reclassify it as non-physical damage are unlikely to succeed when confronted with credible evidence of contamination. Insurers can also be on the hook for failing to act in good faith by conducting investigations that look the other way, and not conducting a full investigation to save dollars at the expense of health.

Thought For The Day 

“Details matter; it’s worth waiting to get it right.”
—Steve Jobs

¹ Maxus Metropolitan, LLC v. Travelers Prop. Cas. Co. Of America, No. 24-1176 (8th Cir. Aug. 28, 2025).