A group of Los Angeles homeowners are suing major insurance companies, including State Farm and Farmers, claiming that they illegally dropped fire coverage in violation of California’s antitrust and unfair competition laws. The plaintiffs, 14 families who lost their homes in recent wildfires, allege that the insurers coordinated efforts to terminate existing policies and stopped selling new coverage in high-risk areas like Malibu. Furthermore, when these families sought alternate coverage, they were funneled to the California FAIR Plan, an insurer of last resort known for its limited coverage and higher rates. The legal representatives argue that the lack of competition among major insurers has unfairly forced consumers into less favorable options, exacerbating their financial strain during a crisis.

Key elements from the lawsuit include:
– **Collusion Allegations**: Major insurers allegedly coordinated to drop fire coverage.
– **FAIR Plan Complications**: Homeowners referred to this plan face less coverage and higher costs.
– **Insurance Coverage Limitations**: Policies under the FAIR Plan are capped at $3 million, with significant gaps compared to normal residential policies.
– **Financial Impact**: Estimated losses from the wildfire damage exceed $30 billion, highlighting the broader economic implications of the insurers’ actions.

You can read this full article at: https://papersourceonline.com/l-a-wildfire-victims-sue-insurance-carriers-for-dropping-fire-coverage/(subscription required)

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