Consumer advocates, led by Consumer Watchdog, are suing to stop a controversial bailout of California's FAIR Plan, which faces financial difficulties after severe wildfires. The state insurance department approved a scheme allowing insurers to collect $1 billion from policyholders across the state to cover the plan's shortfall. Critics argue this unfairly penalizes homeowners, while the insurance companies retain the profits. As the number of FAIR Plan policyholders grows due to the lack of traditional coverage, the implications of this lawsuit could significantly impact policyholders and the insurance landscape in California.
Consumer advocates are suing to halt a homeowner-funded bailout of California's last-resort insurance program, the FAIR Plan, which faces financial instability.
Consumer Watchdog claims regulators are overstepping by allowing insurance companies to charge homeowners for the FAIR Plan's bailout costs, prioritizing profits over rights.
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