Home insurer surcharges for wildfires is legal, judge rules

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Set us as preferred Surcharges that California homeowners have been hit with statewide by insurers defraying the costs of Los Angeles County’s wildfires were ruled legal in a decision released late Tuesday.L.A.County Superior Court Judge Tiana Murillo turned down a petition by advocacy group Consumer Watchdog to halt the charges, which insurers began levying last year after the state’s insurer of last resort couldn’t pay all its January 2025 fire claims.The California FAIR Plan, financially backed and operated by the state’s licensed home insurers, needed a $1-billion bailout from the insurers after it was hit with some $4 billion in claims.

Under a deal Insurance Commissioner Ricardo Lara worked out with the FAIR Plan in 2024, the insurers could seek state approval to surcharge their residential policyholders for up to half of any assessment totaling $1 billion in case the plan needed a bailout in an “extreme worst case scenario” — as it turned out it did.Business The California FAIR Plan, the insurer of last resort, received approval to assess member carriers $1 billion to help pay its L.A.

fire losses -- with consumers possibly on the hook for nearly half.A total of 105 insurers, including State Farm General — California’s largest home insurer — Farmers and Mercury sought and received approval for the surcharges.Because the FAIR Plan assessed its member insurers based on their share of the state’s home insurance market, the policyholder surcharges were in the same ballpark.The median fee for homeowners was $28, according to the department of insurance.The fee can be more or less according to the size of a homeowner’s premium and is split into monthly payments that insurers can spread over one or two years.

Condo owners and renters on average were surcharged less.In a court filing, Consumer Watchdog...