Fourteen Los Angeles families affected by January wildfires have filed a lawsuit against major insurers like State Farm and Farmers, claiming that these companies conspired to drop fire coverage and unfairly limit homeowners' insurance options in specific areas. This lawsuit highlights accusations of antitrust practices, as the insurers allegedly coordinated to deny coverage rather than compete for policies. After losing their insurance, plaintiffs struggled to find alternative coverage, often being referred to the California FAIR Plan, an insurer of last resort established in 1968 to help those denied coverage by traditional carriers.
"Rather than competing with each other to sell insurance in these areas, even if they had to charge more money, they didn't do that," Robert Ruyak, attorney for the plaintiffs, told Realtor.com.
The California FAIR Plan started in 1968 as a means for homeowners to get insurance coverage when they've been denied by traditional carriers. It's not considered a state agency.
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