CA Homeowners Sue Top Insurers, Allege ‘Collusion’ Left Thousands of Wildfire Victims Underinsured | Insurify

Victims of the January Los Angeles area wildfires are suing the top 25 home insurance companies in the state, alleging that the insurers colluded to force high-risk policies out of the private insurance market and into the state's FAIR (Fair Access to Insurance Requirements) Plan.

By canceling existing policies and refusing to write new ones in areas with high wildfire risks, insurers forced homeowners to pay higher premiums for FAIR policies that provided inadequate coverage, the suit charges. As a result, many affected homeowners suffered "massive uncovered losses from January's wildfire disaster," according to a statement by one of the companies that filed suit on the homeowners' behalf.

On April 18, law firms Larson and Shernoff Bidart Echeverria filed two similar class-action lawsuits. The lawsuits allege violations of California's antitrust and unfair competition laws and seek compensatory damages for plaintiffs.

Defendants in the class-action lawsuits include California's largest home insurers: State Farm, Farmers, CSAA, Liberty Mutual, Mercury, Allstate, USAA, Travelers, American Family, Berkshire Hathaway (GEICO), and more.

Plaintiffs paid more but got less protection, suits argue

The lawsuits outline an alleged conspiracy, beginning in 2023, by the defendant insurance companies, which had been selling residential and commercial property insurance in the state for years.

One of the lawsuits — Todd Ferrier et al. v. State Farm Group et al. — claims the insurance companies, which had previously competed in the insurance market, "agreed, combined, colluded and conspired to eliminate competition between them related to their offering of property insurance coverage products, including fire insurance."

It alleges that the defendants agreed to stop selling and renewing property insurance policies in specific areas, including the Pacific Palisades, Malibu, and Altadena. As a result, homeowners who previously held coverage through the defendant insurers had no other option but to seek coverage through the state's insurer of last resort, the FAIR Plan.

The FAIR Plan is designed to be an option for residents who can't find coverage elsewhere. The plan provides limited coverage with a cap of $3 million, yet policies are typically more expensive than private insurance options.

Outlining the same complaints, the second lawsuit — Anthony Canzoneri v. State Farm Group et al. — claims "the net result of this scheme was that these homeowners were each unjustly forced to pay thousands of extra dollars for deficient policies, while Defendants collectively reaped a windfall worth billions of dollars."

Wildfires kindled collusion lawsuits

The lawsuits follow the January 2025 wildfires in Los Angeles County, which damaged or destroyed thousands of homes. The Palisades Fire alone burned nearly 24,000 acres, destroying 6,837 properties and damaging another 973 structures.

"Those who lost their homes have been shocked to find themselves systemically and dramatically underinsured under FAIR Plan policies, despite having paid artificially inflated premiums," according to a claim made in the second lawsuit.

Since 2020, the number of FAIR Plan policyholders has significantly increased from around 200,000 to about 560,000 in March 2025. The FAIR Plan will likely have to pay out around $4 billion in claims following the January fires, according to reporting from the Los Angeles Times.

What's next? Requests from plaintiffs

Plaintiffs in the Todd Ferrier et al. v. State Farm Group et al. lawsuit are seeking "three times the damages each have sustained, and attorney's fees, costs, and interest as provided by statute." The Anthony Canzoneri v. State Farm Group et al. lawsuit seeks a similar outcome for members of the class action.

Insurers, thus far, have not commented on the lawsuits.

Plaintiffs in both lawsuits have requested trial by jury.

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