In May 2025, multiple homeowners filed class-action lawsuits in Los Angeles County Superior Court against over 200 insurance companies—including State Farm, Farmers, and Mercury—alleging collusion to drop coverage in high-risk wildfire areas such as Malibu and Pacific Palisades.
The plaintiffs claim insurers violated California’s Cartwright Act by conspiring to push policyholders into the California FAIR Plan, a last-resort insurance program with limited coverage and higher costs. They seek treble damages and injunctive relief.
Defendants argue that recent policy withdrawals were made independently, citing climate-related risk assessments.
Key legal issues include:
- Whether coordinated withdrawal can be proven
- The definition of “collusion” under California antitrust law
- Whether the FAIR Plan is being misused as a profit shield
The case is significant for LA-area homeowners and may impact future property insurance regulations statewide. The litigation remains in early procedural stages.
