Homeowners affected by the January 2025 wildfires in Los Angeles County have filed lawsuits against some of California’s largest insurance companies, including State Farm and Allstate. The lawsuit accuses the insurance companies of violating California’s antitrust and unfair competition laws by colluding to push customers into limited-coverage policies. The lawsuits were filed in Los Angeles Superior Court and allege major insurers conspired to reduce competition and drive homeowners into the California FAIR Plan. The FAIR plan is California’s insurer of last resort and offers decreased coverage at higher premiums
An attorney representing the homeowners issued a statement that read in part the insurers “reaped the benefits of high premiums while depriving homeowners of coverage” they were willing and able to pay for. The lawsuits specifically name State Farm and Allstate along with other top carriers who are required to support the FAIR Plan. Consumer advocates allege the industry worked in unison to offload high-risk properties onto the FAIR Plan while continuing to charge rising premiums elsewhere. “This was clearly a concerted attempt by the entire industry,” said Jamie Court, president of Consumer Watchdog, a Santa Monica-based nonprofit. “They’ve created a system that fails the very people insurance is supposed to protect.”
The FAIR Plan was created in the late 1960’s and was intended to provide coverage to Californians in high-risk areas who had been previously turned away by private insurers. As wildfires have increased in both frequency and cost, the FAIR plan has become overloaded. Between 2020 and 2025 the number of FAIR Plan residential policyholders has nearly tripled reaching nearly 560,000 individual policyholders.
The January 2025 fires are projected to cost the FAIR Plan about $4 billion which exceeds their reserves and reinsurance. To cover these losses, California Insurance Commissioner Lara authorized a $1 billion assessment on insurers backing FAIR. These insurers can recoup half of that through temporary surcharges on policyholders statewide and many critics call this plan nothing more than an “industry bailout.”
Carmen Balber, executive director of Consumer Watchdog says “Homeowners across the state should not be on the hook for the L.A. fires,” and went on to say “Insurance companies abandoned those neighborhoods.” The plaintiffs are seeking triple damages, arguing they were knowingly left underinsured. FAIR policies are capped at $3 million in coverage and often carry higher premiums than commercial alternatives. Many victims of the wildfires are calling for a formal investigation into the insurance industry, alleging delays, denials, and displacement in the wake of catastrophe.
We represent people injured as a result of the careless and reckless acts of others. At the end of the day your case can only be settled one time and you need to know all of the facts beforehand. Insurance companies have paid our clients hundreds of millions of dollars in compensation because we uncover the facts. When insurance companies fail to offer full compensation we are not intimidated at the prospect of going to trial. We help with serious injuries that require serious representation. We are the Law Offices of Guenard & Bozarth, LLP. Our attorneys have more than 60 years of experience specializing in only representing injured people. Call GB Legal 24/7/365 at 888-809-1075 or visit www.gblegal.com
