Overview

• Consumer Watchdog has filed a lawsuit in Los Angeles Superior Court to block potential surcharges on homeowners' insurance policies under the FAIR Plan.
• The legal action targets a $1 billion FAIR Plan assessment approved by Commissioner Ricardo Lara, which could pass $500 million in costs to policyholders statewide.
• The group argues that the surcharge mechanism violates the 1968 statute that created the FAIR Plan and was implemented without sufficient public input or oversight.
• The FAIR Plan has seen rapid growth, now covering over 555,000 policies, as private insurers retreat from high-risk wildfire zones due to escalating claims.
• The lawsuit highlights broader concerns over California's insurance market, as climate-driven wildfires strain financial sustainability and regulatory strategies.