Business
Created in California: How Barry's turned grueling military workouts into a sexy lifestyle
Arezu Aghaseyedjavadi signed up for her first Barry’s class in 2017, motivated to give the high-intensity workout a try after noticing how fit everyone seemed when she flew from San Francisco to Los Angeles for weekly work trips.
She lost 50 pounds in the first year and got hooked. More than 1,500 classes later, the venture capitalist, who now lives in Pasadena, pays about $500 a month for the boutique fitness chain’s top-level membership and has sweated it out at Barry’s around the world: all seven L.A.-area locations as well as studios in the Bay Area, San Diego, Austin, New York, Miami, Chicago, Boston, the United Kingdom, Dubai and Abu Dhabi — “I went there for 48 hours for a business meeting and I was like, ‘I want to get my Barry’s in,’” she said.
Aghaseyedjavadi was one of hundreds of Barry’s superfans who participated in a recent three-day bash to celebrate the brand’s 25th anniversary — a considerable milestone in the competitive, fad-of-the-moment world of health and fitness clubs, estimated to be a $98-billion global market.
Barry’s co-founder Barry Jay, right, and Chief Executive Joey Gonzalez in Hollywood in October.
(Wally Skalij / Los Angeles Times)
To mark the occasion, the company rented a Hollywood film studio and set up free cold-plunge baths, facial stations, a Lululemon pop-up and zero-gravity Therabody Lounger chairs. Employees handed out packets of Liquid I.V. hydration powder and samples of Mosh, a line of protein bars by Maria Shriver and her son Patrick Schwarzenegger. The kickoff party, DJ’d by Diplo and attended by *NSYNC’s Lance Bass, stretched into the next morning.
The main event was a series of huge 225-person workout classes, for which the company trucked in $1 million worth of Woodway treadmills, 2,200 dumbbells and resistance bands, and a custom audiovisual system to replicate the neon-red, pulsating nightclub aesthetic that has become a staple of the Barry’s experience.
An hourlong adrenaline-racing workout in a windowless room with hundreds of panting strangers spaced inches apart was unfathomable a few years ago, when gyms and fitness studios abruptly closed at the start of the pandemic. In the chaotic months that followed, many — overwhelmed by ever-changing government mandates and unable to lure back COVID-anxious clients who’d switched to virtual or outdoor exercise programs — never reopened.
Hundreds of Barry’s superfans attended a Hollywood party in October to celebrate the company’s 25th anniversary, a considerable milestone in the fad-of-the-moment world of fitness. After a challenging pandemic period, the company has been in rebuilding mode and today operates 84 studios in 14 countries.
(Presley Ann / Getty Images)
Founded in West Hollywood, Barry’s had become one of the most recognizable names in a crowded industry and was in the midst of an aggressive global expansion in early 2020. One hundred forty thousand people were attending a Barry’s class at least once a week, and the company planned to open 16 new locations by the end of the year, a 23% increase.
Instead, it halted operations at all 70 of its studios and laid off or furloughed two-thirds of its 1,300 employees.
“We were peaking — I call it the era of opulence,” Chief Executive Joey Gonzalez — ripped, toasty tan and typically tank-topped — said in a recent interview at Soho House Holloway. He started taking Barry’s classes in 2003 when he was an aspiring actor, became an instructor the following year and has led the company since 2015.
“Barry’s was so successful, we were firing on all cylinders, fitness in general had never been more top of mind for consumers,” he continued. “It was the most unnatural experience in life to go from generating over $100 million of revenue per annum to zero dollars.”
Big-box gyms, the Thighmaster and step aerobics dominated the American fitness landscape when personal trainer Barry Jay and two investor partners leased a small storefront at the corner of La Cienega Boulevard and Holloway Drive in 1998.
Jay didn’t have a military background — he’d previously worked as an instructor at Gold’s Gym — but called his new business Barry’s Bootcamp to highlight the hardcore nature of the workout, which he designed to be far tougher than the high-reps-with-light-weights body-sculpting classes that were popular at the time.
2006 photo of Barry Jay, center, leading a Barry’s Bootcamp workout in West Hollywood.
(Carlos Chavez / Los Angeles Times)
He leaned into the name: His studio was decked out in camouflage wallpaper and reinforced netting, and members were given numbered silver dog tags when they joined. During class, which cost $15 each and alternated between heart-pumping intervals on the treadmill and strength training with dumbbells on the floor, he would holler orders to sprint faster and lift heavier while pacing the darkened room in cargo shorts.
The punishment for being late was stair climbs or push-ups. Once, when Jay caught a client eyeing the clock, he got on a step stool and detached it from the wall.
“I said, ‘Hang on, Sandy, let me help you out. Why don’t you hold the clock while you run, and now you won’t have to worry what time it is,’” he recalled recently.
Barry’s co-founder Barry Jay, left, in 2014 with Joey Gonzalez, who started as a client and eventually became CEO. Gonzalez led a rebrand of Barry’s, phasing out the boot camp name and the intimidating military theme.
(Courtesy of Barry’s)
Jay, now retired and living in Las Vegas, had flown into L.A. to be a special guest at the 25th anniversary festivities. Sitting serenely on a treadmill before the start of the first 225-person workout, the company’s largest class ever (the average Barry’s class can fit about 50 people), he attributed some of his brash behavior back then to personal issues he was dealing with as he struggled to maintain his sobriety while teaching 40 times a week.
A 2006 Times profile detailed his problems with cocaine and other drugs, describing Jay as “an addict waiting to happen, with a more-is-more personality that made him do everything to the extreme … A few would leave class in tears.”
“I’m very soft now,” Jay, 60, said. “There was a lot of me that evolved with each and every year. But I will say it was all done in the spirit of the workout.”
Barry’s itself evolved, slowly phasing out the boot camp part of its name and the intimidating drill sergeant teaching style.
In its place, it pivoted to a workout-as-elite-lifestyle hook that helped launch the era of the modern boutique fitness studio. A class was no longer just a fat-burning sweat session — it was an all-encompassing, and expensive, health and wellness journey that became part of your identity.
Gonzalez was behind the glow-up. Still teaching Barry’s classes, he persuaded the company’s co-founders to let him invest his own money to open the company’s second location, in San Diego, in 2009.
With its red-lighted nightclub vibe and luxe amenities, Barry’s helped launch the era of the modern boutique fitness studio.
(Wally Skalij / Los Angeles Times)
Two years later, he took out a second mortgage on his home to bring Barry’s to New York City, unveiling an upscale studio that would serve as the brand’s blueprint going forward: a sleek small-format space stocked with high-end bath products and other luxe amenities; top-of-the-line exercise equipment; a Fuel Bar selling pricey made-to-order protein shakes; and an army of absurdly hot instructors.
“It is inspirational and it is aspirational,” Gonzalez, 46, said of the rebranded Barry’s. “It just felt like the right thing to do. I think we were entering a new era where millennials don’t necessary respond to that type of punitive behavior.”
The hyper-curated vibe combined with the company’s 50-50 mix of cardio and lifting caught on among designer-athleisure-clad women, gay men and celebrities including Kim Kardashian and David Beckham. In 2019, a spandex-bodysuited Jennifer Lopez tried out to become a Barry’s instructor in an SNL skit (“How do you think you get this way? I haven’t had a carb since I was a baby!”).
Boutique brands hinge on cult status — for those who are there, they can’t imagine being anywhere else.
— Simeon Siegel, managing director at BMO Capital Markets
Rivals copied its high-energy format and feel, leading to an explosion of lookalike studios around the world selling their own take on premium high-intensity interval training (HIIT). There are now brands that combine rowing and weights, StairMaster and weights, climbing and weights, boxing and weights, spinning and weights, treadmill-rowing-and-weights, and so on, and major gym chains have introduced boot-camp-style workouts to their class schedules.
More than 3 million people have tried the Barry’s workout, a combination of treadmill intervals and strength training, since its founding in 1998.
(Wally Skalij / Los Angeles Times)
Whichever studio you choose, it’s a near-guarantee that the playlists will be heavy on Britney and Beyoncé, the walls selfie-ready and cheeky-hashtag-adorned, the core customer base made up of die-hard fanatics reverse-lunging and dead-lifting in branded merch.
“Boutique brands hinge on cult status — for those who are there, they can’t imagine being anywhere else,” said Simeon Siegel, managing director at BMO Capital Markets. “People are proud to describe their experiences — they don’t just say they worked out; they tell you where they went.”
Despite the higher price point compared with traditional gyms — a single Barry’s class in L.A. now costs $34, and classes were shortened a few years ago to 50 minutes from an hour — “boutique fitness enthusiasts willingly pay a premium,” an October report by Research and Markets said.
“The boutique fitness industry is experiencing remarkable growth, with the global market projected to reach a staggering $79.66 billion by the end of 2029, as compared to $48 billion in 2022,” the data analysis firm said. It attributed the surge in popularity to factors including a sense of community, small class sizes and the trendy, meticulously cultivated atmosphere.
During the pandemic, many fitness operators simply unplugged their cardio machines, locked their doors and waited it out. Barry’s closed all of its Red Rooms in the U.S. on March 16, 2020, but Gonzalez wanted to find ways to keep the business going.
The next morning, he led a live full-body workout over Instagram that drew more than 20,000 participants, a precursor to the Barry’s At-Home virtual group classes that the chain would begin to offer a few weeks later. To help quarantined customers build their personal workout stations, and to make some money during the shutdown, Barry’s sold its branded weights, exercise benches, mats and resistance bands online.
Fitness really got the short end of the stick. There seemed to be support for so many different industries, but nothing for fitness.
— Joey Gonzalez, Barry’s CEO
Many iterations would follow: There was Barry’s X, an app-based workout for clients to do on their own. It debuted Barry’s Outdoors, its silent-disco strength classes held in parking lots, on rooftops and in the parking garage of the deserted Beverly Center; clients worked out in masks spaced six feet apart, wore wireless headphones to hear the instructors and had to wait in between rounds while employees sanitized each station. In New York, Barry’s reopened a couple of its studios as “open gyms” where people could work out on their own, with a remote instructor’s voice piped in through speakers.
When the company was finally given the green light to turn on its red lights again, it held indoor classes at 25% or 50% capacity.
“This was no fault of ours, so it was really challenging to process, internalize and problem-solve,” Gonzalez said of that strange time. “Fitness really got the short end of the stick. There seemed to be support for so many different industries, but nothing for fitness.”
Due to its size, Barry’s was not eligible for PPP loans. But it did receive incentives from Miami Mayor Francis Suarez and moved its headquarters to the city, where Gonzalez lives, in 2021.
Barry’s, with financial backing from private equity firms North Castle Partners and LightBay Capital, has been in rebuilding mode ever since the most stringent government restrictions were lifted. Today it has 84 studios in 14 countries, just shy of where it had planned to be at the end of 2020, and employs 1,400 people, its largest workforce to date.
The success of Barry’s led to an explosion of HIIT-based boutique fitness studios around the world. Their popularity stems from the combination of a sweat-dripping workout with a meticulously curated, aspirational aesthetic.
(Wally Skalij / Los Angeles Times)
Its pace of expansion has been slower and more deliberate than that of franchise giants such as Orangetheory Fitness (more than 1,500 studios in 25 countries) and Xponential Fitness, a group that owns CycleBar, Row House and several other boutique brands. More than half of Barry’s studios are corporate-owned.
Revenue and attendance were up about one-third last year compared with 2022, the year Barry’s became profitable again. Roughly 20% of its clients take three or more classes a week, and 3 million people have tried the Barry’s workout since its inception. Just over half of its clients are 28 to 45 years old, about two-thirds of them female, the company said.
Now Barry’s is looking to double the size of its portfolio in the next five years, and making big investments in the L.A. market, where it already has a significant presence.
Next month Barry’s will close its original West Hollywood studio, a run-down outlier at more than a quarter-century old, and move into a gleaming 21,000-square-foot space a few blocks away. It’s bringing a concept called Ride X Lift to the new studio — the low-impact workout combines spinning and weights and is designed for people who dread the tread. There are also studios coming to Santa Monica, Studio City and Newport Beach in the first half of the year.
The pandemic led to a forced consolidation toward larger, well-capitalized fitness brands, but it’s still an extremely fragmented industry with a lot of players and high attrition rates, Siegel of BMO said.
“The best fitness products that are not winning on price are winning because of an emotional connection that is as strong as the physical one,” he said.
It has also become a more expensive business to run, so the pressure is on to get notoriously fickle customers in the door and convert them into fervent regulars like Aghaseyedjavadi.
“One time I did three classes in one day: a 6 a.m. and a 7 a.m., then I went to work, then there was traffic in L.A. so I was like, ‘Let me just go do a Barry’s at night,’” she said.
“It was the same instructor from the morning. He saw me and was like, ‘You’re back?’ I was like, ‘Should I do a fourth class?’ And he’s like, ‘No, please go home.’”
Business
Commentary: It’s not just vaccines — from infancy to adolescence, Republicans are waging war on children’s health
The conservative assault on child health starts with the anti-vaccine campaign and proceeds to cutbacks in nutrition assistance and narrowed access to healthcare.
In the old days, before accepted medical protocols came under partisan assault, infants typically received a vitamin K shot to enhance blood-clotting capability and a few drops of an antibiotic to stave off eye infections before leaving the hospital, followed by a thorough round of vaccines against life-threatening diseases.
Americans assumed that “whatever a family could afford, the country had already decided this child was worth protecting,” Robert B. Shpiner, a critical care expert at UCLA medical school, wrote recently. “I have seen children harmed by disease, poverty, by bad luck. I had not, until now, seen them harmed so methodically by their own government.”
Shpiner’s targets were the changes in healthcare policies instituted by the Trump administration generally and Health and Human Services Secretary Robert F. Kennedy Jr., as well as the mistrust in medical authority that Kennedy and his followers have helped to foment.
We’re going to be paying this bill for years to come, because the lack of proper nutrition has profound effects on learning and disability.
— Robert B. Shpiner, UCLA
As Shpiner wrote in the Guardian, the administration’s assault on child health begins with its anti-vaccination policies. In January, Kennedy’s agency reduced the list of recommended childhood immunizations to 11 from 17, removing shots for COVID-19, hepatitis and meningitis, among other diseases. The agency made the changes without the customary professional consultations, KFF has reported.
But that’s only the tip of the iceberg. “It’s just one thing after another,” Shpiner told me.
What triggered him into writing his Guardian essay, he says, was learning that congressional Republicans had advanced an agriculture appropriations bill that would cut the fruit and vegetable benefit for children in WIC, the supplemental nutritional program for women, infants and children to $10 a month from $26.
“That got me to looking at this as a sequence,” he says, starting with the reduction of child immunizations, followed by the proposed cuts in WIC and the cuts in food stamps enacted as part of the Republican budget bill that Trump signed one year ago Saturday (i.e., the Fourth of July, 2025).
“The image of us taking food away from kids and not giving them enough money to buy some apples and berries—the short-term response is outrage,” he says, “but the medium- and long-term effect is that we’re going to be paying this bill for years to come, because the lack of proper nutrition has profound effects on learning, and disability and anemia. A number of measures of health and success match with nutrition.”
At almost every stage of childhood development, he notes, programs aimed at preserving or enhancing children’s health have gone on the chopping block.
“A vaccine rule one week, a food program the next,” he wrote. “Each change arrives wrapped in a reasonable rationale: fiscal discipline, local control, parental choice. But arrange them in the order a child actually grows, and the rationales stop mattering.”
Judging from their rhetoric, one would think that Republicans would move heaven and earth to foster child immunizations, nutritional assistance and access to medical care.
In “Communion,” his recent book about his conversion to Catholicism, for example, Vice President JD Vance writes: “We want more children in our society because children are profoundly good — the greatest value add we can create.”
Yet the programmatic cutbacks advocated for and implemented by the Republican Congress and Trump give the lie to that sentiment. Let’s examine chapter and verse.
Measles is the canary in the coal mine for vaccination and public health, and at this moment, the canary is singing a doleful tune. The Centers for Disease Control and Prevention count 2,134 cases in the U.S. as of June 25. That’s poised to exceed the 2,288 cases in all of 2025, which was the worst outbreak since 1991.
There’s no question why this is happening. It’s because of a decline in measles vaccinations below the 95% generally considered to provide “herd immunity,” in which the disease is so rare that even unvaccinated individuals are protected from exposure.
Kennedy may not deserve all the blame for the immunization decline, but as pseudoscience debunker Steven Novella has pointed out, as secretary he has “done everything possible to undermine vaccine science and confidence in health institutions.”
Kennedy has paid lip service to the value of the MMR vaccine, which combines immunizations for measles, mumps and rubella. But he has claimed without evidence that the vaccine causes deaths “every year” and that the vaccine hasn’t been safety-tested, which isn’t so. He has asserted that it shouldn’t be subject to a government mandate. He also has promoted treatments for measles that aren’t known to be effective.
(The Department of Health and Human Services didn’t respond to my request for comment on the vaccine initiatives.)
As children grow, the crisis of malnutrition kicks in. The House GOP’s cuts to WIC are still only on the drawing board. But the Republican budget bill incorporated cuts to food stamps — the Supplemental Nutrition Assistance Program, or SNAP — that have driven some 4 million people off the program. In 13 states that have published data, according to the Center on Budget and Policy Priorities, child enrollment fell by more than 800,000, or 16%, between July 2025 and May of this year.
“This is where the nutrition cuts become a medical, not merely a moral, story,” Shpiner says. “Iron-deficiency anemia in infancy is associated with poorer cognitive, motor, and behavioral outcomes that persist more than 10 years after the deficiency itself has been corrected — the deficit does not fully reverse even with later treatment. Withdrawing produce and protein from WIC and SNAP at the peak window of brain growth is not a budget line that resets the following year; it is a developmental exposure with a long tail.”
The combination of reduced immunization and poor nutrition build on each other. “Unvaccinated kids are going to get sicker,” he told me. “If they’re malnourished, they’re going to get sicker. If their parents don’t get affordable care, they’re going to be strapped. It becomes a synergistic and multiplicative cascade.”
Indeed, the administration’s assault on Medicaid and the Affordable Care Act intensifies the damage. Enrollment in Medicaid and the Children’s Health Insurance Program, which is part of Medicaid, fell by 4.8 million people, or 6%, from March 2025 through March 2026, according to government data. The enrollment decline for children alone came to more than 1.9 million, or 5%.
White House spokesperson Kush Desai challenged the latter figure when I asked for comment. But it came from KFF, which sourced it to the government’s Centers for Medicare and Medicaid Services, or CMS.
“Nothing has been done to alter insurance or Medicaid coverage of any vaccination,” Desai told me by email, “and parents are encouraged to seek out the counsel of their pediatrician to make the best decisions for their children.”
The prospects are for further declines. That’s because new work requirements for enrollees in Medicaid expansion under the Affordable Care Act are almost certain to drive enrollment down, due to obstacles including paperwork burdens and administrative snafus, resulting in even some eligible enrollees losing their coverage.
(These problems became so pronounced in Arkansas, which implemented work requirements during the first Trump term, that a federal judge axed the program.)
The work rules enacted last year as part of the Republican budget bill aren’t scheduled to start until Jan. 1, but three states are starting early — Nebraska (May 1), Montana (Wednesday) and Iowa (Dec. 1). The impact on enrollment isn’t yet clear.
Whatever the effect of these changes, the public is going to know less about them than before. The reason is that the administration has shrunk the requirements for reports of immunization from states, changing the reports from mandated to voluntary. The affected data include childhood immunization rates against diphtheria, tetanus, pertussis, polio, measles, mumps and rubella, hepatitis, chicken pox and flu; and rates for 13 year olds and expectant mothers.
“While seemingly a small, technical change, the removal of vaccine reporting in Medicaid and CHIP may make it more difficult to monitor and understand vaccination trends for a large share of children in the U.S.,” KFF noted.
I asked the Department of Health and Human Services to explain the rationale for these changes, and specifically whether they were aimed at obscuring the effect of the narrowing of vaccine recommendations, but didn’t hear back.
Business
How the FIFA World Cup is providing a boost for L.A. businesses
Johnny Beig may have played in a semi professional cricket league in Australia, but this summer he’s a big fan of soccer in the United States.
It’s not just because he’s rooting for the World Cup team, though.
FIFA emblems are featured on jerseys that were created by the Dioz Group and distributed for all employees at the 16 FIFA World Cup venues this summer.
(Genaro Molina / Los Angeles Times)
Last year, Beig’s Beverly Hills-based company, Dioz Group, won a $2.5 million contract with On Location, FIFA’s hospitality partner, to design, manufacture and distribute uniforms for all employees working at FIFA World Cup venues this summer.
These include the people welcoming attendees into stadiums, VIP lounge chefs, waiters and the flagbearers during the opening ceremony.
After a multi-step application process, including presentations of its planning and strategy, Dioz says it produced more than 50,000 clothing garments including suits, jackets, shirts and hats and delivered them to the 16 World Cup venues around the U.S., Canada and Mexico in June.
Thanks in part to the World Cup contract, the company’s revenue has reached $15 million so far this year, compared with $20 million last year, Beig said. He declined to disclose the company’s net income but said the business was profitable.
“We are working with larger names that we would have never imagined we would,” he said. “The FIFA World Cup is the pinnacle. Working with the largest sporting event in the world is what we’re very proud of. I don’t think it gets any bigger than that.”
Volunteers line up to prepare to display the Canadian flag before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.
(Kelvin Kuo / Los Angeles Times)
Dioz is among the many small businesses across Los Angeles that are getting a boost from the global sporting event, said Kevin Klowden, a senior fellow at the Milken Institute.
The influx of hundreds of thousands of fans into the city has been a boon to hotels, transportation services and restaurants, in addition to those in the special events and logistics economy, Klowden said, calling the event the “equivalent of multiple Super Bowls.”
“The number of contracts that are there, it’s a big deal,” he said. “Given the fact that L.A.’s filming is only slowly recovering, having something like the World Cup is definitely a boost.”
Dioz was co-founded by Johnny, 44, and his brother Tony in 2006. The brothers were born in India and raised in Australia, where Johnny enjoyed a brief career as a semi professional cricket player.
He realized his future wasn’t as a professional athlete, but he wanted to stay connected to the sports world, so he began making uniforms for his cricket team in 2006.
He then got a referral to make uniforms for multiple teams in the area before starting an apparel company.
“I wanted to stick with something I was passionate about, which is sports,” he said.
Volunteers unravel the center field display before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.
(Ronaldo Bolanos / Los Angeles Times)
In 2012, Beig moved to Los Angeles and established Dioz‘s Los Angeles headquarters to tap into the U.S. market. During the pandemic, the company started supplying medical apparel to hospitals and schools, and the business took off, with revenue doubling in 2020, Beig said.
Dioz now has over 150 employees, including 15 in L.A., and manufactures its apparel at factories in China, India, Bangladesh, Turkey and the Philippines. Tony runs an office in Dubai.
Before the World Cup, Dioz provided employee uniforms for events including Super Bowl LIX and Copa America, which may have given it a leg up on the FIFA contact.
Now, with a World Cup contract on their resume, Beig said he’s setting his sights on even bigger events.
“This gives us an edge over the next FIFA events worldwide as well, where we can showcase our skills and we can handle it,” Beig said. “So it gives us a good opportunity to work with sporting events like the UEFA Championship and Premier League.”
As companies get new business from the World Cup, Klowden said it’s important that they leverage their new position to continue that growth.
Companies that benefited from the World Cup might be in a position to bid on even bigger contracts, especially with the Olympics coming up in 2028, Klowden said.
“The really important part in any of these deals is that if a company ran something like this, then they are able to build off of that success,” Klowden said. “Let’s say you’re a company that did a big uniform order or a big food order, and the World Cup goes, and you invested in new manufacturing capacity, or you invested in new clothing machines, or whatever you do; suddenly you don’t have that market anymore, then you’ve just wasted all that money ramping up.”
Business
Home insurer surcharges for wildfires is legal, judge rules
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.
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 said $420 million in surcharges were approved.
In its April 2025 lawsuit filed against Lara, the Los Angeles group made a series of arguments in seeking to overturn the residential surcharges, which it deemed an industry bailout. It did not sue over related commercial surcharges.
Consumer Watchdog contended in its lawsuit that the surcharges violated Proposition 103 — the 1988 measure that governs insurer rate hikes — because the proposition does not allow for them.
It also claimed Lara did not follow regulatory protocol in promulgating the new policy.
The group further alleged that the FAIR Plan’s governing statutes do not give Lara the authority to permit the surcharges — and that the statutes require insurers to share in the plan’s profits and losses, and not shift losses to policyholders.
Murillo, and another judge who previously heard the case, turned down all of the consumer group’s arguments in separate rulings, the last of which Murillo issued Tuesday night.
Lara celebrated his legal victory over Consumer Watchdog, which has accused Lara of having close ties to insurers and sought to oust him from office. His terms ends in January.
“This victory sends a loud and clear message: The era of allowing special interests to derail consumer choice is over. We have the momentum, we have the authority, and we will continue to fight until every Californian has access to the coverage they deserve,” Lara said in a statement.
Attorney Will Pletcher, litigation director of Consumer Watchdog, said the group disagreed with the decision and would “consider all options to move this forward.”
“It’s important to try to protect California consumers from these surcharges that we think are in pretty clear conflict with both Proposition 103 and the FAIR Plan,” he said.
Hilary McLean, a spokesperson for the plan, said in a statement it did not have any position on the ruling, given the plan “does not have a role in determining how insurers manage costs associated with assessment.”
Denni Ritter, vice president of state government relations for the American Property Casualty Insurance Assn., a major industry trade group, said the decision rejected “the reckless lawsuit brought by the self-interested group Consumer Watchdog…”
“This ruling preserves a vital tool to protect the stability of the California insurance market. Blocking cost recovery would have undermined the state’s last-resort coverage option,” she said in a statement.
The 2024 policy was issued in response to the rapid growth of the plan due to a series of wildfires over the last decade that prompted multiple insurers to retreat from the state’s home insurance market.
The plan had 264,000 homeowners on its rolls in September 2022, a figure that rose to 452,0000 in the months before the fires — and its residential policyholders have since increased to 663,000 as of March.
The FAIR Plan offers policies that typically cost more than those issued by regular insurers while offering less coverage.
A Times analysis last year found that in the Palisades and Eaton fire zones, the plan’s rolls nearly doubled to 28,440 from 2020 to 2024.
That concentration of policyholders led to the plan’s large losses during the Jan. 7 wildfires, which damaged or destroyed more than 18,000 structures, killing at least 31 people.
It’s been estimated that the insured losses for the wildfires could ultimately total as much as $40 billion, exceeding any past wildfires worldwide. Ritter said that so far insurers have paid $23.7 billion in claims.
The 2025 wildfires were not the only time the FAIR Plan has needed a bailout, though it is the first time its member insurers surcharged policyholders.
In 1993, it assessed carriers after fires in Altadena and Malibu, and in 1994 it did so after the Northridge earthquake. The assessments totaled $260 million.
The plan received approval this year from the insurance department for a 29% rate increase for its homeowner dwelling policy that will take effect in October.
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