Lawsuits Accuse Insurers of Conspiring to Limit Fire Insurance in California

In April 2025, two lawsuits were filed in Los Angeles County Superior Court by law firms representing California homeowners against multiple insurance companies. The lawsuits allege a conspiracy among these insurers to deny property insurance coverage in fire-prone areas of California, including neighborhoods affected by recent fires in Los Angeles County. Plaintiffs assert that this conduct violates California’s antitrust laws and the California Unfair Competition Law.

The lawsuits, Ferrier v. State Farm Fire & Casualty Co. and Canzoneri v. State Farm Fire & Casualty Co., respectively represent individual homeowners and seek class action status. Both cases demand treble damages, injunctive relief, and other remedies. The plaintiffs claim that starting in mid-2023, insurers coordinated a plan to terminate existing fire insurance policies and avoid issuing new policies in designated geographies such as Pacific Palisades and Altadena.

This alleged coordination purportedly aimed to push homeowners toward purchasing insurance through the California FAIR Plan, a state-mandated insurer of last resort for properties deemed otherwise uninsurable. The FAIR Plan policies tend to offer less comprehensive coverage at higher premiums compared to standard insurers. According to the complaints, insurers share in the FAIR Plan’s profits and losses, potentially benefiting financially by limiting their direct liability exposure.

The complaints further allege that the insurers maintained their agreement via regular communications and exchanges of information, facilitated through the FAIR Plan and associated trade groups. These actions raise significant regulatory and compliance questions regarding antitrust violations and market manipulation within the California property insurance sector.

The cases highlight ongoing challenges in the California property insurance market, especially in high-risk wildfire zones where insurers face significant exposure. The legal actions signal increased scrutiny on insurer practices related to risk selection, price setting, and policy availability, potentially influencing future regulatory responses and market dynamics.