A California judge has ruled the state’s bare-bones home insurance program’s handling of smoke damage claims is unlawful, a decision that could have wide-ranging implications as insurers increasingly deal with the aftermath of wildfires.

Los Angeles-area residents whose homes survived the Eaton wildfire in January face a whole different set of struggles to their neighbors whose homes were burned to the ground.

The wildfires that destroyed homes in multiple sections of the Los Angeles area will test California’s efforts to stabilize the state’s insurance marketplace after many insurers stopped issuing residential policies due to the high fire risk.