Media Coverage
Source: Digital Insurance
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
04.30.25
Two antitrust lawsuits filed in California allege that major home insurers, led by State Farm, conspired to push homeowners onto the more expensive and limited California FAIR Plan, the state’s insurer of last resort. Plaintiffs claim this shift left them underinsured or overpaying, particularly during recent wildfires.
According to Insurance Recovery & Advisory counsel Christopher Butler, the outcome will hinge on the high cost of discovery, the difficulty of proving conspiracy over coincidental business decisions and insurers’ strong desire to avoid a jury trial.
“When you look at the list of insurers sued, there’s a massive list of insurers. Imagine the number of employees,” Butler told Digital Insurance. “Discovery is going to be very expensive…State Farm is the lead named defendant…Already they’re looking at a lot of expense if they win. The best case scenario is if they get rid of this thing early.”
If the defendants feel confident about the facts uncovered during discovery, they may file a motion for summary judgment. As Butler explained, at that stage “we no longer assume all the stuff in the complaint is true.” However, if any documents found during discovery support the plaintiffs’ claims, a judge is unlikely to grant summary judgment.
“Now you’re left with the jury trial, and these insurers are going to be very uncomfortable going before a jury,” Butler said. “The only thing is they probably won’t find something with all of these companies. Some companies may be able to get themselves out—one or two, especially the smaller ones, might have a successful motion for summary judgment. The case could fracture in that sense.”
In legal arguments, the defendants in the complaints are likely to point out that all insurance policies on the FAIR Plan have to be approved by the California Department of Insurance, Butler noted. “The insurers are going to say they were complying with the regulatory regime and makeup. They submitted their plans. They got approved,” he said. “What are you saying we did that was wrong?”
He also noted that the industry may invoke climate change to justify the difficulty of maintaining private homeowners’ coverage in high-risk areas.
“Normally, the point of suing corporate interests is perceived environmental damage. Now we have the corporate industry that's going to be using global warming as its big defense,” he concluded.
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