A recent lawsuit alleges that multiple insurance companies worked together in 2023 to “suddenly and simultaneously” stop providing coverage or writing new policies in areas prone to wildfires. This move has particularly affected neighborhoods such as Pacific Palisades and Altadena, which were severely damaged during the January wildfires that destroyed nearly 17,000 structures and resulted in at least 30 fatalities. The lawsuit, filed by homeowners who lost their houses in the LA fires, claims that this collective action by insurance companies has forced hundreds of homeowners to rely on the FAIR Plan, which offers limited coverage capped at $3 million. As a result, many homeowners are now underinsured and struggling to rebuild their homes.
The lawsuit highlights the growing concern over insurance availability in high-risk areas following significant natural disasters. Homeowners affected by the wildfires are facing significant challenges in recovering and rebuilding due to the limited insurance options available to them.
