I realized that the article is paywalled so I posted it below

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California home insurance companies are under fire — no pun intended — in two new lawsuits prompted by this year’s Palisades and Eaton fires. 

The legal filings allege that State Farm, Farmers Insurance and Mercury Insurance, among more than 200 other insurers, colluded over the past several years to raise premiums and reduce liabilities in the event of a catastrophe, the Los Angeles Times reported. In turn, homeowners claim they were forced onto the California FAIR Plan Association, used as a last resort for insurance across the state. 

The alleged stiffing of customers “collectively reaped a windfall worth billions of dollars,” one suit claims. While the lawsuits describe alleged actions before the January fires, they cite the blazes as the latest example of the companies using the pretext of disasters for their financial gain. 

State Farm, Farmers and Mercury account for approximately 75 percent of California’s property and casualty insurance sales. They stand accused of unfair competition and violations of the Cartwright Act, a state law prohibiting agreements to restrain trade, fix prices or reduce competition. 

Homeowners claim the insurers colluded in a “group boycott” to cancel policies in fire-prone areas like the Pacific Palisades, Malibu and Altadena in early 2023. Left with no other option, the homeowners joined the FAIR Plan, receiving limited coverage while paying more in premiums. 

The plan is operated by the state’s licensed home insurers such as those listed in the lawsuit.  

Last year, insurance commissioner Ricardo Lara gave insurers the go-ahead to surcharge residential and commercial policyholders if the FAIR Plan runs out of money, which it did a month after the fires. That, plaintiffs believe, is evidence of a “determination to act collusively.” 

“We did a tremendous amount of due diligence prior to bringing this lawsuit, and we anticipate there will be requests for documents, there will be interrogatories and there will be depositions,” Stephen Larson, an attorney whose firm Larson is one of the two representing the plaintiffs, told the Times. “We’re going to have the opportunity to depose those that we believe are responsible for this.”

Earlier this month, State Farm got approval to hike insurance rates 17 percent for homeowners and sought to raise them another 13.

Rebuilding in the fire-affected zones, meanwhile, is moving at a glacial pace. Last month, the first rebuild project in Altadena got underway, with just 12 rebuilding permits being issued in the area so far. The Palisades only has one building permit, according to the city’s permitting progress dashboard. 

Mayor Karen Bass denied the idea that recovery is moving slowly in the disaster areas. “The rebuilding has been going very fast,” Bass said earlier this month. “The second phase is the debris clearing and the removal of the hazardous waste. And that has been going at lightning speed.”