Insurance Curator WASHINGTON — Class-action litigation by homeowners against property insurers has surged after a string of back-to-back extreme-weather events, as policyholders across the United States press courts to overturn claim denials and nonrenewals they blame on rushed inspections, automated underwriting models and opaque policy language. Plaintiffs and consumer advocates say the wave of lawsuits follows catastrophic hurricanes and wildfires in 2024 and into 2025 that left thousands of homeowners with damaged or destroyed homes and, they allege, with claims rejected or policies dropped — prompting coordinated legal filings from Florida to California and litigation battles over subrogation in Hawaii. (insurify.com)
What happened
- Who: Thousands of homeowners, law firms representing them, state regulators and major insurers including national carriers and specialty writers.
- What: A rising number of proposed class actions and mass lawsuits alleging wrongful denials, underpayments, improper nonrenewals and unfair claims-handling after storms and wildfires.
- When: The spike follows concentrated disaster seasons in 2024 — notably successive hurricanes that struck Florida in the autumn of 2024 and major California wildfire losses — with litigation and regulatory responses continuing through 2025 and into early 2026. (weather.com)
- Where: Most visibly in Florida, California and Hawaii, but the trend is evident in other advanced economies where exposure to climate-driven perils has risen. (floir.gov)
- Why: Plaintiffs and regulators point to insurer reliance on automated tools and third-party aerial or satellite imagery, narrower interpretations of policy language (especially around concurrent causation and flood exclusions), and financial pressure on insurers as the primary drivers of denials and nonrenewals. Insurers say they are managing catastrophic loss and guarding solvency, sometimes using data-driven tools to speed underwriting and detection of potential fraud. (reinsurancene.ws)
Scope and scale
Independent ratings firms and state regulators report unusually high denial rates following the recent twin hurricanes and a heavy wildfire season. Weiss Ratings, which analyzed filings to the National Association of Insurance Commissioners (NAIC), found that several large property insurers closed 40–70% of homeowners’ claims in 2023 and said denial and closure rates rose further in 2024 after multiple storms. In Florida alone, Weiss and state filings show that insurers closed roughly 46–47% of homeowners’ claims without payment after the 2024 storms, and a measurable fraction of those policyholders have filed suit. (prnewswire.com)
The Florida Office of Insurance Regulation (OIR) posts disaster reporting showing hundreds of thousands of claims after hurricanes such as Helene and Milton, with large numbers of claims still being tracked, closed without payment for reasons that include policy exclusions and deductibles, and a steady stream of consumer complaints. Regulators have demanded extra data from carriers and warned against improper use of anti-concurrent-causation clauses to deny storm claims that involve both wind and flood. (floir.gov)
High-profile cases and legal flashpoints
Liberty Mutual nonrenewals in California: In Southern California, a proposed class action filed in late 2024 alleges that Liberty Mutual used aerial imagery to justify nonrenewal notices to thousands of policyholders, citing roof “algae/mildew/mold/moss” that homeowners and independent roofers say was incorrectly identified. The complaint seeks class certification on behalf of thousands of Californians who say the company relied on flawed remote inspections to exit risk-prone areas. The lawsuit has become emblematic of a broader consumer fight over remote underwriting decisions and abrupt nonrenewals. (sfchronicle.com)
Maui wildfires and subrogation fights: The proposed global settlement of claims arising from the devastating 2023 Maui wildfires — a deal exceeding $4 billion — triggered a parallel legal fight between victims, settling defendants and insurers seeking subrogation rights for claims they paid after the fire. Insurers have argued they are entitled to seek recovery from parties responsible for the fires; plaintiffs and some local leaders countered that insurer subrogation demands could undermine the settlement and delay payments to survivors. The dispute escalated to the Hawaii Supreme Court, which in February 2025 issued a ruling clarifying insurers’ remedies in the settlement context and setting legal questions about how subrogation and the “made-whole” doctrine apply in complex mass-tort settlements. (sec.gov)
Regulatory and courtroom responses
State regulators have moved to tighten oversight and secure data. Florida’s OIR required carriers to provide additional detail on claims-handling and warned that carriers whose denials improperly rely on concurrent-causation or other exclusions face administrative action and restitution. In California, the Department of Insurance has stepped up market-conduct reviews and consumer outreach after wildfire complaints. Regulators say they are increasingly skeptical of automated or remote-only inspections that cannot be corroborated with on-the-ground evidence. (carriermanagement.com)
“There is nothing more heartbreaking than a family that followed the rules — paid premiums for years — and then can’t get the policy they bought to cover them when disaster strikes,” said Martin D. Weiss, founder of Weiss Ratings, describing the denial-rate trends in a public statement. Weiss and other analysts say higher denial rates appear to be connected to rising catastrophe frequency and insurers’ efforts to contain payouts while preserving ratings and capital. (prnewswire.com)
Technology, automation and disputes
Many insurers now use automated analytics — including aerial and satellite imagery, third‑party property analytics like ZestyAI or Cape Analytics, and in some cases machine-learning models — to speed underwriting, triage claims after disasters and identify potential fraud. Insurers and model vendors say these tools increase efficiency and consistency across millions of properties; consumer advocates and plaintiffs’ lawyers counter that automated tools can produce false positives, misidentify damage, and substitute a digital “snapshot” for a context‑rich, human examination. (reinsurancene.ws)
Plaintiff attorneys point to instances where aerial pictures taken from thousands of feet conflated neighboring properties, or where an AI-driven model flagged a roof for replacement based on pixel‑level pattern matching that local contractors disputed. Those cases have become the nucleus for proposed classes that argue systemic use of such tools led to wrongful denials or nonrenewals. “Homeowners were blindsided by nonrenewals based on demonstrably false data,” the complaint in the Liberty Mutual case says. (sfchronicle.com)
Industry view and financial context
Insurers defend actions as necessary risk management after heavy catastrophe seasons. Many carriers emphasize the extraordinary scale of losses and the limits of reinsurance markets. In public comments and regulatory filings, carriers say they have paid billions to policyholders and that some denials reflect legitimate exclusions (notably flood coverage that homeowners did not buy) or losses below deductibles. The industry also warns that rising claim costs, if not managed, will exacerbate premium spikes and could lead to market exits that would harm consumers in the long run. (beinsure.com)
The Insurance Information Institute and the Triple-I — trade and industry analysts — report that insured losses from certain peril types have climbed in recent years. Triply-I spokespersons and other industry executives note that improving accuracy in risk selection and pricing is critical to maintaining underwriting capacity, though they say insurers must balance that with fair treatment of policyholders. “Fewer claims and a decline in severity indicate improved mitigation in some areas, but that doesn’t eliminate the fairness issues raised by denied claims,” said Sean Kevelighan, CEO of the Triple-I, in commentary about claim trends. (insuranceindustryblog.iii.org)
Legal mechanics and class-action strategy
Class actions have become a preferred vehicle for aggregated disputes because they allow large groups of homeowners who face similar alleged conduct (same insurer, similar denials or systematic nonrenewals triggered by the same vendor tool) to litigate common questions of law and fact together. Plaintiffs’ lawyers say mass litigation is efficient for victims who otherwise lack the resources to challenge nationwide carriers. Insurers counter that individual policy differences and factual variations over damage and mitigation make class treatment inappropriate in many cases.
In Hawaii and elsewhere, the litigation has taken a more complex turn where insurers pressing subrogation claims seek recovery from parties defendants alleged to have caused the disaster — a legal maneuver that can pit insurers’ recovery rights against victims’ interests in a global settlement fund. The Maui litigation illustrated how high-stakes settlement mechanics can be upended when insurers assert separate, dollar-for-dollar claims to preserve balance-sheet health. (mauinews.com)
Consequences for homeowners and housing markets
For individual homeowners, denials and nonrenewals can be catastrophic: they may lose access to affordable private insurance and be forced into residual-market vehicles (such as state FAIR plans in California or Citizens in Florida) that are more costly and in some states provide narrower coverage. Denials also carry practical consequences — delayed repairs, mortgage challenges, and increased risk of foreclosure for families without the cash to rebuild. Consumer groups say the human toll of denied claims is often hidden behind regulatory statistics. (sfchronicle.com)
Consumer advocates and lawmakers respond
Consumer groups and some state lawmakers have pressed for tougher oversight, including transparency requirements for insurers’ use of third-party data, audits of automated decision tools, and limits on nonrenewals based solely on remote imagery. In Florida, the regulator’s data call and public admonitions about anti-concurrent-causation denials represent a near‑term attempt to curb what officials characterize as improper handling of combined peril claims. In California, the Department of Insurance has expanded enforcement activity, market-examinations and public education for wildfire survivors. (carriermanagement.com)
What the courts are saying
Courts have been the decisive forum for many of these disputes. The Hawaii Supreme Court’s 2025 ruling on insurers’ remedies in the Maui settlement context is a recent example of judicial engagement with thorny subrogation and settlement issues. Judges have also scrutinized whether plaintiffs’ claims are suitable for class treatment, and whether insurer conduct rises to the level of bad faith or statutory violation under states’ unfair-claims-settlement statutes. Those rulings will shape whether the current wave of lawsuits consolidates into a smaller set of nationwide precedents or instead splinters into case-by-case disputes. (hawaiipublicradio.org)
Looking ahead: policy and market remedies
Industry analysts and consumer advocates agree on one point: climate-driven volatility will likely keep pressure on homeowners’ insurers. Potential policy responses under discussion include stricter regulation of model governance for AI and third-party analytics, state-level limits on nonrenewals tied solely to remote assessments, expanded mitigation programs (to reduce risk and losses), and public-private solutions to ensure affordable flood and catastrophe coverage.
Insurers warn that blunt regulatory mandates could accelerate market exits in high-risk geographies, shrinking availability. Consumer groups counter that unchecked denials and algorithmic decisions undermine the social contract at the heart of insurance. “Where you live shouldn’t be a sentence,” said a plaintiffs’ attorney representing wildfire and hurricane survivors in filings and public statements. (The attorney’s comment appears in court pleadings.) (lawcommentary.com)
Bottom line
The surge in class actions and litigation over homeowners’ claim denials reflects a collision among climatic risk, modern underwriting tools and long‑standing disputes over the scope of coverage. Courts and regulators are being asked to decide whether insurers are using new technology and narrow legal arguments to avoid paying legitimate claims or whether carriers are right to resist payouts that could destabilize their ability to supply insurance at scale. The outcome will determine not only whether individual policyholders recover following catastrophic losses, but how homeowners’ insurance is priced, underwritten and regulated in the era of escalating weather extremes. (prnewswire.com)
Sources: reporting and public records, including filings and press releases from the Florida Office of Insurance Regulation, Weiss Ratings analysis of NAIC filings, public court filings and media reporting on class actions and settlements in California and Hawaii, and industry commentary from the Insurance Information Institute and Triple-I. Key documents and reporting cited include state OIR catastrophe reports, the Liberty Mutual complaint in San Diego County Superior Court, the SEC Form 8‑K disclosing the Maui settlement framework, and regulatory statements and guidance from state insurance departments. (floir.gov)
(Reporting contributed from state regulatory filings and court documents.)