When Southern California homeowner Maria Badin tried to renew her longtime homeowner policy with Liberty Mutual, she was shocked to be denied. Ms. Badin had been a Liberty Mutual homeowner client for 32 years, from the day she purchased her home in Poway, California, in 1993.

Liberty Mutual is a Fortune 100 company and is one of the largest insurance companies in the United States. As of December 31, 2023, Liberty Mutual had $49.4 billion in annual consolidated revenue. 

Ms. Badin was upset at the denial and decided to sue Liberty Mutual. In her suit, filed on Dec. 19 in San Diego County Superior Court, she says that the insurance giant dropped her for false reasons.

The lawsuit is being filed as a class action open to Liberty Mutual policyholders who were denied their homeowner insurance renewals. In her quest for class certification, Ms. Badin says she wants to include other Liberty Mutual clients who were also denied their renewals “based on a condition of their property that was misrepresented by Defendants.”

The class-action suit could include about 17,000 homeowners who lost their insurance in November 2024 after Liberty Mutual denied their renewals for “dwelling fire insurance.” Though this occurred after catastrophic wildfires, the company said that the denials were due to “technical” issues.

The plaintiff’s complaint alleges that Liberty Mutual “conducted flawed aerial inspections, falsely reporting issues such as algae, mildew, or mold on homeowners’ roofs. Despite homeowners providing evidence refuting these claims, Liberty Mutual refused to reverse these decisions.”

At the time of the denial of her homeowners insurance, Liberty Mutual sent a letter to the plaintiff saying they had conducted an aerial inspection of her property and found “algae/mildew/mold/moss” on her roof.

In court documents, Ms. Badin said she had no idea that there were any contaminations on her roof, so she hired a licensed roofing company. The independent roofing company inspected her roof and said there was no evidence of algae, mildew, or moss.

When Ms. Badin asked Liberty Mutual in writing to reconsider, providing documentation from her roofer that there was no “algae/mildew/mold/moss” on her roof, Liberty Mutual refused. In the letter, the company told her that the issues “appear to still be present at your property” and that the decision to deny her renewal was valid.

In legal documents filed in December, Ms. Badin said she was upset that Liberty Mutual accused her falsely of having “algae/mildew/mold/moss” on her roof.

“Driven by a desire to maximize profits, property casualty insurance companies, including Defendants, have engaged in a troubling trend of dropping California homeowners’ insurance policies like flies,” said Ms. Badin in the complaint. “Homeowners, who have dutifully paid their premiums for years, have been, and are, being blindsided by Defendants’ nonrenewal notices informing them their policy will not continue — for stated reasons that are demonstratively false.”

The new lawsuit arrives at a time when many thousands of homeowners lost their residences to the devastating wildfires in L.A. Large insurance companies such as Allstate, State Farm, and many more have been creating much tighter underwriting standards or have denied new policies in California due to the calamitous fires and the impact climate change has had in the state, where ‘fire season’ is an expected annual occurrence.

The lawsuit seeks damages, restitution, and an injunction to stop Liberty Mutual from continuing these practices, alleging violations of California's Unfair Competition Law and breach of contract.