Global Investment Pulse
  • Investing
  • Stock
  • Business
  • Politics
Business

California homeowners allege home insurance companies colluded to deny coverage

by admin April 24, 2025
April 24, 2025

LOS ANGELES — A group of California homeowners is taking on insurance companies that they say illegally coordinated to deny coverage to fire-prone areas, leaving thousands of displaced residents drastically underinsured as they fight for funding to rebuild.

The homeowners, many of whom were affected by the recent wildfires that torched large swaths of Los Angeles, have filed a lawsuit alleging that California insurance companies colluded in a “nefarious conspiracy” to shut out high-risk homeowners from the insurance market.

The complaint, filed Friday in Los Angeles County, accuses dozens of major insurance companies and their subsidiaries of collaborating in a “group boycott” of certain areas to eliminate competition and force homeowners toward the state’s insurer of last resort, a program known as the California FAIR Plan.

The lawsuits name California’s largest home insurers, including State Farm, Farmers, Berkshire Hathaway, Allstate and Liberty Mutual. None of them have provided a comment on the allegations.

The FAIR Plan has its own reserves and is intended to provide basic insurance to residents who cannot find a policy through the private marketplace. While it was created by the governor and the Legislature, and the state’s insurance commissioner has oversight, it is not a public program. The insurance companies named in the lawsuit jointly own and operate the FAIR plan, offering terms that limit their risk and place a higher burden on policyholders.

“They knew that they could force people, by dropping insurance, into that plan which had higher premiums and far lower coverages,” Robert Ruyak, an attorney with Larson LLP, the law firm that brought the complaint, said. “They realized that they could take this device, which is to protect consumers, and turn it into something that protected them.”

Ruyak argues the insurance companies knew they could limit their liability by directing policyholders onto the FAIR Plan, which allows companies to recoup up to half of their losses through premium increases, by agreeing that no company would insure high-risk areas.

“All of these insurance companies participate in the California FAIR Plan. They own it and manage it. It is not a California entity, it is not even a separate entity … the only way this scheme would work is if no one would pick up a dropped policy at any price, on any terms. And that’s what happened.”

Millions of U.S. homeowners have in recent years struggled to buy property insurance as companies have increasingly declined to offer coverage to people who live in high-risk areas, particularly as climate change has supercharged some natural disasters. An NBC News analysis in 2023 found that a quarter of all U.S. homes may be at risk of a climate-induced insurance shock.

California has been among the hardest hit by what some have called an “insurance crisis.” The state’s FAIR Plan, meanwhile, has been the subject of growing scrutiny and frustration from insurance regulators and customers.

The plaintiffs are asking for a jury trial and seeking payment for three times their damages. 

A separate class-action lawsuit filed Friday makes similar allegations.

This post appeared first on NBC NEWS

previous post
Inside the $1 billion berry startup backed by Ray Dalio’s family office
next post
Additions to Heliostar Metals Management Team

You may also like

China outlines more controls on exports of rare...

October 11, 2025

Paramount acquires Bari Weiss’ The Free Press, naming...

October 8, 2025

Charlie Javice sentenced to 7 years in prison...

October 1, 2025

Video game maker Electronic Arts to be acquired...

October 1, 2025

Nearly 200,000 BMWs recalled over potential fire risk

October 1, 2025

YouTube to pay $24 million to settle Trump...

October 1, 2025

Ben & Jerry’s co-founder resigns, claiming parent company...

September 30, 2025

Trump says U.S. will impose new tariffs on...

September 29, 2025

Ben & Jerry’s co-founder resigns, claiming parent company...

September 29, 2025

Former Fed chairs warn that removing Lisa Cook...

September 28, 2025

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

    Join our mailing list to get access to special deals, promotions, and insider information. Your exclusive benefits await! Enjoy personalized recommendations, first dibs on sales, and members-only content that makes you feel like a true VIP. Sign up now and start saving!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      October 12, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      October 11, 2025
    • Crypto Market Update: Altcoins Retreat as Bitcoin ETFs See US$2.7 Billion in Inflows

      October 11, 2025
    • Tech Weekly: Market Dives After Week-Long Rally as China/US Tensions Reignite

      October 11, 2025
    • Editor’s Picks: Historic Week — Gold Breaks US$4,000, Silver Takes Out All-time High

      October 11, 2025
    • About us
    • Contacts
    • Privacy Policy
    • Terms and Conditions
    • Email Whitelisting

    Disclaimer: globalinvestmentpulse.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 globalinvestmentpulse.com | All Rights Reserved

    Global Investment Pulse
    • Investing
    • Stock
    • Business
    • Politics