Insurance lawsuit news in 2025 and 2026 is dominated by five fronts: California regulators’ enforcement push against insurers over Los Angeles wildfire claims, antitrust cases accusing major health insurers of using shared algorithms to underpay out-of-network providers, a class action over UnitedHealth’s use of artificial intelligence to deny Medicare Advantage coverage, the criminal prosecution of Luigi Mangione for the killing of UnitedHealthcare CEO Brian Thompson, and settlements reshaping how auto insurers value totaled vehicles.
California Wildfire Claims Enforcement
The January 2025 Los Angeles wildfires produced claims expected to reach roughly $40 billion, with insurers having paid more than $23.7 billion as of early 2026.1CalMatters. Insurance After Los Angeles Fires Two California Department of Insurance actions are driving the litigation story.
State Farm Accusation
On May 4, 2026, the Department filed an Accusation and Order to Show Cause against State Farm General Insurance Company, the first step toward a public hearing before an administrative law judge. Regulators reviewed 220 of State Farm’s roughly 11,300 residential wildfire claims and documented 398 violations of the Unfair Insurance Claims Practices Act and California Insurance Code Section 790.035, with another 34 violations from consumer complaints.2California Department of Insurance. Press Release 019-2026
The alleged conduct includes unreasonable delays, lowball settlement offers, what the Department called “adjuster roulette” (repeated reassignment of adjusters so policyholders had no consistent contact), and improper handling of smoke damage claims, including failures to issue required written denials for testing requests.2California Department of Insurance. Press Release 019-2026 Penalties under state law can run $5,000 per violation, or $10,000 for willful violations. No hearing date has been set, and no public response from State Farm has appeared on the enforcement docket as of June 2026.
The FAIR Plan Smoke Damage Fight
The California FAIR Plan Association, the state’s insurer of last resort, is in a parallel battle. In July 2025, Commissioner Ricardo Lara filed a cease and desist order after a multi-year investigation found at least 418 violations tied to smoke damage claims from the Palisades and Eaton fires.3California Department of Insurance. Press Release 054-2025 The Department alleged the Plan unlawfully required policyholders to prove “permanent physical damage” before paying smoke claims.
In June 2025, a Los Angeles County Superior Court judge ruled in Aliff v. California FAIR Plan Association that the Plan’s restrictive smoke policies offered less coverage than California’s standard fire insurance policy requires. The FAIR Plan did not appeal but reportedly shifted to a new standard requiring policyholders to show a “distinct, demonstrable and physical alteration” of their property.4Darrow. California Homeowners Fight FAIR Plan Over Smoke Damage Denials A separate case, Jordan et al. v. California FAIR Plan Association, filed in April 2025, alleges bad faith, breach of contract, and willful failure to remediate smoke and toxic ash contamination.
Pending Legislation
Commissioner Lara is sponsoring two bills in response. SB 876, the Disaster Recovery Reform Act, would require insurers to maintain disaster recovery plans, double penalties for fair-claims violations during declared emergencies, mandate restitution, and address adjuster-reassignment delays.2California Department of Insurance. Press Release 019-2026 As of early June 2026, SB 876 had been referred to the Assembly Committees on Insurance and Judiciary.5Digital Democracy. SB 876 Bill Tracker AB 1795, the Smoke Damage Recovery Act, would establish science-based testing and restoration standards for smoke-damaged homes.
Health Insurer Antitrust Cases Over Out-of-Network Pay
Two large antitrust tracks allege that major health insurers used shared pricing vendors to suppress out-of-network reimbursements.
The Zelis Repricing Case
On March 30, 2026, Judge Brian E. Murphy of the U.S. District Court for the District of Massachusetts denied a joint motion to dismiss a consolidated class action against Aetna, Cigna, Elevance Health, Humana, UnitedHealth Group, and the repricing vendor Zelis Healthcare.6Fierce Healthcare. 5 Major Insurers, Vendor Zelis Must Face Repricing Antitrust Claims, Judge Rules The case started in March 2025 when Pacific Inpatient Medical Group filed suit; it was later consolidated with cases from California, New Jersey, and Kansas providers.
Providers allege Zelis sat at the center of a “hub-and-spoke conspiracy,” taking confidential pricing data from the insurers and using its repricing tools to push out-of-network reimbursements down to as little as 1% of invoiced charges.7DistilInfo. Judge Lets Antitrust Suit Against Insurers Stand Judge Murphy rejected the argument that policyholder cost savings justify price-fixing among competitors.8Insurance Business Magazine. Antitrust Lawsuit Against Five Major Health Insurers Clears Federal Court
The MultiPlan MDL and Arizona’s State Suit
A separate multi-district litigation in the Northern District of Illinois consolidates more than 100 provider lawsuits against repricing company MultiPlan and major insurers. In June 2025, the MDL judge allowed federal and state antitrust claims and state consumer protection claims to proceed while dismissing unjust enrichment claims. The U.S. Department of Justice filed a statement of interest in March 2025.9Becker’s Payer. What To Know About MultiPlans Litigation Saga
On June 1, 2026, Arizona Attorney General Kris Mayes filed a state lawsuit in Maricopa County Superior Court against MultiPlan and eight insurers: Aetna, Cigna, UnitedHealthcare, Humana, Elevance, Molina, Centene, and Health Care Service Corp.10Arizona Attorney General. Attorney General Mayes Sues MultiPlan and Major Health Insurers for Alleged Price-Fixing The complaint alleges the companies used a shared algorithm to set artificially low out-of-network reimbursement rates, violating the Arizona Uniform Antitrust Act and the Arizona Consumer Fraud Act, and that the arrangement padded insurer profits while raising patient out-of-pocket costs.11Arizona Medical Association. ArMA Joins AG Mayes for Announcement of Lawsuit Aetna and MultiPlan have said they will defend themselves.12Fox 10 Phoenix. Arizona Sues MultiPlan, Major Health Insurers Over Alleged Algorithm Price-Fixing
UnitedHealth’s AI Claim Denials
A class action filed in November 2023 in the District of Minnesota alleges UnitedHealth Group, UnitedHealthcare, and NaviHealth used an AI tool called nH Predict to systematically deny post-acute care under Medicare Advantage. The plaintiffs are estates of patients whose skilled nursing facility coverage was terminated.13Georgetown Law Litigation Tracker. Estate of Gene B. Lokken et al. v. UnitedHealth Group Inc. et al. They allege more than 90% of claim denials and over 80% of preauthorization denials were overturned on appeal, which they argue shows UnitedHealth knew the tool was inaccurate.14Skilled Nursing News. Lawsuit Against UnitedHealth Over AI-Based Denials of Post-Acute Care Moves Ahead
In February 2025, Judge John Tunheim denied part of UnitedHealth’s motion to dismiss, allowing breach of contract and breach of the implied covenant of good faith and fair dealing claims to proceed, and rejecting the argument that plaintiffs had to exhaust the full Medicare appeals process before suing.15STAT News. Lawsuit UnitedHealth Artificial Intelligence Care Denials Medicare Advantage Moves Forward
On March 9, 2026, Magistrate Judge Shannon Elkins ordered UnitedHealth to produce documents dating back to January 2017 across six of seven requested discovery categories. The required materials cover the development and implementation of nH Predict, records from government investigations into AI in claims adjudication, financial records tied to the NaviHealth acquisition and projected post-acute cost savings, documents about UnitedHealth’s internal AI review board, and the identities of medical directors and care coordinators involved in denials for 300 proposed class members.16Becker’s Payer. Judge Orders UnitedHealth To Hand Over Broad Discovery in AI Coverage Denial Case The judge rejected UnitedHealth’s attempt to limit discovery to the post-2019 deployment period and called the company’s argument that nH Predict did not actually make coverage decisions a “merits-based argument” that cannot foreclose the plaintiffs’ right to documents.17Georgetown Law Litigation Tracker. Order on Motion To Compel Discovery Requests for the tool’s source code and underlying medical guidelines were denied.
The Luigi Mangione Prosecution
Luigi Mangione, 27, has pleaded not guilty to state murder charges and federal interstate stalking charges in the December 2024 killing of UnitedHealthcare CEO Brian Thompson.18NPR. Luigi Mangione Court Hearings, Growing Support The state trial before Judge Gregory Carro is scheduled to begin September 8, 2026, after being postponed from June at the defense’s request. A federal trial is set for October 13, 2026.19U.S. News. Luigi Mangiones Lawyers Reverse Course, Say They Wont Pursue a Psychiatric Defense A federal judge ruled in January 2026 that Mangione will not face the death penalty, and a state judge dismissed terrorism charges in September 2025. If convicted on the remaining state or federal charges, he faces life without parole.
In May 2026, Judge Carro ruled that key prosecution evidence is admissible, including a gun, a silencer, and a notebook with writings prosecutors say express hostility toward the health insurance industry and describe a plan to “wack” an executive.18NPR. Luigi Mangione Court Hearings, Growing Support The defense had signaled an “extreme emotional disturbance” defense, which under New York law does not claim innocence but seeks to reduce murder to manslaughter, carrying a maximum of 25 years.20STAT News. Luigi Mangione Psychiatric Defense Murder Case On June 18, 2026, defense attorney Karen Friedman Agnifilo wrote to Judge Carro withdrawing the notice “at this time,” after the judge ordered unsealing of materials from a sealed hearing on the defense that the team argued would prejudice the separate federal case.19U.S. News. Luigi Mangiones Lawyers Reverse Course, Say They Wont Pursue a Psychiatric Defense
State Farm Total-Loss Auto Settlement
On March 30, 2026, a federal judge in the Eastern District of Arkansas granted preliminary approval to a $15.6 million settlement in Chadwick v. State Farm Mutual Automobile Insurance Co. The suit alleged State Farm systematically underpaid total-loss claims by applying improper “typical negotiation adjustments” to Audatex valuation reports. The proposed class covers Arkansas residents who filed first-party total-loss claims between November 2016 and October 2021 where the payout was based on an Audatex report using those adjustments. Eligible class members can recover an average of about $489 per claim, representing 68% of the estimated adjustment amount. A final approval hearing is set for July 15, 2026, with a claims deadline of August 19, 2026.21Top Class Actions. State Farm Settlement Over Totaled Car Payouts Receives Preliminary Approval
State Farm also faces a separate total-loss class action filed in North Carolina federal court in late 2025 and reportedly paid $8.8 million to Washington state policyholders to resolve diminished-value claims.21Top Class Actions. State Farm Settlement Over Totaled Car Payouts Receives Preliminary Approval On April 27, 2026, the Sixth Circuit decertified a class in another total-loss suit against the insurer.22AM Best. State Farm Auto Insurance Legal Developments
Blue Cross Blue Shield Provider Settlement
The provider settlement in the Blue Cross Blue Shield antitrust litigation, which alleged the plans conspired to divide markets and restrict competition, became effective on September 23, 2025. The deal includes a $2.8 billion cash payment and injunctive relief that economists valued at a minimum of $17.3 billion. The claims deadline passed in July 2025, and the administrator is expected to begin distributing payments in 2026. Objections, including those from HCA, were overruled during final approval.23Whatley Kallas. BCBS Settlement
Climate Exclusions in Insurance Policies
Litigation is also testing whether standard policies cover climate-linked losses. In October 2024, the Hawai’i Supreme Court held in Aloha Petroleum, Ltd. v. National Union Fire Insurance Company of Pittsburgh that greenhouse gas emissions qualify as “pollutants” under standard pollution exclusion clauses, barring coverage for claims tied to emitting greenhouse gases or misleading the public about them.24Supreme Court of Hawaiʻi. Aloha Petroleum Ltd. v. National Union Fire Insurance Company of Pittsburgh The court found no ambiguity in the policy language.25Climate Case Chart. Aloha Petroleum Ltd. v. National Union Fire Insurance Co. of Pittsburgh The ruling arrived as climate-related insured losses topped $100 billion annually since 2020 and were projected to exceed $200 billion in 2025.26Clyde & Co. Climate Change Insurability Challenge