Los Angeles County fire victims have filed lawsuits against three large home insurers alleging they were systematically underinsured, leaving them without enough money to replace or rebuild their homes after the Jan. 7 blazes.

The twin lawsuits, filed Wednesday in Los Angeles County Superior Court, allege that USAA, a Texas-based insurer that serves the military community, and two insurers affiliated with AAA for years underestimated the replacement cost of the homes, lulling the policyholders into buying inadequate coverage.

“These families paid their premiums, trusted their insurers, and did everything right,” attorney Gregory L. Bentley said in a statement. “But when disaster struck, they learned their coverage was little more than an illusion. These companies promised peace of mind, but instead left their members stranded, homeless, and hopeless.”

The lawsuits allege fraud, negligence, breach of contract and other causes of action, and seek damages and reform of the insurers’ practices.

Bekah Nelson, lead communications director for USAA, said that the company was reviewing the lawsuit and could not comment on specifics, but said “USAA’s dedication to outstanding member service is widely recognized.”

“When wildfires struck Southern California, our teams were on the ground within days, working to support our members in their time of need. To date, we have paid nearly $1.4 billion to help members recover from their losses,” she said, adding the company has made payments on more than 90% of homeowner claims.

A spokesperson for CSAA Insurance Exchange, which primarily serves AAA members in Northern California, said it does not comment on pending litigation. A spokesperson for the Interinsurance Exchange of the Automobile Club, which serves AAA members in Southern California, also declined comment.

The lawsuits open a new front in the litigation that has been spawned by the catastrophic fires, which caused at least 29 deaths and damaged or destroyed more than 16,000 homes and businesses in Altadena, Pacific Palisades and other communities.

Several lawsuits have been filed against the California Fair Plan Assn., the state’s insurer of last resort, alleging that it is not adequately handling smoke-damage claims arising out of the fires.

More than 100 of the state’s licensed home insurers, including the CSAA, USAA and the Interinsurance Exchange, are defendants in an April lawsuit accusing the companies of colluding to drop policyholders and force them onto the FAIR Plan in order to reduce their claims exposure. The plan’s policies typically cost more and offer less coverage than traditional commercial insurance.

The lawsuits filed Wednesday, which are virtually identical except for details pertaining to the different defendants, allege that the problem of underinsurance is “pervasive” and stems from “cost estimator software many insurers use to recommend coverage limits to insureds,” as well as “poor design choices, perverse profit and commission incentives, volume business, and other shortcomings.”

The lead plaintiffs in the lawsuit filed against the two AAA insurers, James and Lisa Fulker, bought a three-bedroom, two-bathroom, 1,872-square-foot home on Kingsport Drive in Malibu in 2020, according to the lawsuit.

The newly renovated home — which featured a kitchen with a center island, quartz countertops, high ceilings, a fireplace, an entertainment patio and a master suite with a walk-in closet and spa-like bath — had $713,000 in primary dwelling coverage and 125% extended replacement cost coverage, the lawsuit states.

After the fires, however, the couple found their coverage was inadequate as they received estimates of at least $800 per square foot or more to rebuild, far exceeding the $380-per-square-foot calculations of their insurer, the lawsuit states.

The lead plaintiffs in the USAA lawsuit, Ethan and Marijana Alexander, had a 2,135-square-foot, four-bedroom, three-bathroom, near-custom home on Bienveneda Avenue in Pacific Palisades that they bought in 2018, according to the lawsuit.

The home had $584,000 in dwelling coverage and a 25% home protection endorsement of $146,000, the lawsuit states.

Even with the additional coverage, the complaint alleges the couple don’t have adequate insurance to rebuild, with USAA calculating the cost at $342 per square foot and the couple receiving estimates at more than $850 to $1,000 per square foot, the lawsuit states.

Job opportunities at the Port of Los Angeles are dwindling as President Trump’s steep tariffs take a hit on global trade and a major economic engine for the regional economy.

Nearly half of the longshoremen who support operations at the port went without work over the last two weeks, Gene Seroka, executive director of the Port of Los Angeles, said in an interview.

The port processed 25% less cargo than forecast for the month of May, he said.

Trump’s tariffs have drastically stemmed the flow of goods into the U.S., driving down activity at the neighboring ports of L.A. and Long Beach, which collectively processed more than 20 million 20-foot-long cargo units last year.

The two ports are the largest in the country and provide jobs for thousands of dockworkers, heavy equipment operators and truck drivers.

But work has fallen off sharply in recent weeks. Over the last 25 work shifts, only 733 jobs were available for 1,575 longshoremen looking for work.

“They haven’t been laid off, but they’re not working nearly as much as they did previously,” Seroka told The Times. “Since the tariffs went into place, and in May specifically, we’ve really seen the work go off on the downside.”

Marine terminal operators post available work opportunities, known as job orders, on a digital board at the port three times a day. Longshoremen can review the job orders at each shift and bid on the jobs they want to take. If there are more longshoremen than job orders, a portion of workers will go without pay.

The average of 733 job orders posted over the past 25 shifts, which is equal to roughly two weeks, is unusually low.

Ordinarily, between 1,700 and 2,000 job orders are posted during a typical day shift, and between 1,100 and 1,400 are posted during a standard night shift.

Seroka attributed the decrease in job opportunities to lower cargo volume moving through the port.

In May, 17 cargo ships canceled their planned trips to Los Angeles amid uncertainty over duties the Trump administration imposed worldwide.

Although May is typically a busier month than April, this past May saw 18% less cargo processed than the month prior, according to port data.

The falloff comes during a critical time in advance of the Christmas shopping season, orders for which are usually placed before July 1.

Conditions are not expected to significantly improve anytime soon.

“The June numbers that we’re projecting right now are nowhere near where they traditionally should be,” Seroka said.

An average of five ships have entered the port each day over the last week. This time of year, there would typically be between 10 and 12 ships in the port each day.

“The drop in cargo volume caused by Trump’s tariffs will mean empty shelves when products don’t reach our stores, rising prices on everything from groceries to clothes to cars, and undoubtedly, more Americans out of work,” U.S. Sen. Alex Padilla of California said in a news conference last month.

The decline in shipping has broader ripple effects on L.A.’s logistics economy.

A 2023 report found that the ports of Los Angeles and Long Beach contributed $21.8 billion in direct revenue to local service providers, generating $2.7 billion in state and local taxes and creating 165,462 jobs, directly and indirectly.

A decline of just 1% in cargo to the ports would wipe away 2,769 jobs and endanger as many as 4,000 others, the study found.

Union officials could not be reached for comment on Friday but had previously predicted job losses for their members.

“Some of the workforce will not be getting their full 40 hours a week based on the loss of cargo,” Gary Herrera, president of the longshoremen union ILWU Local 13, warned last month.

“That is going to have an effect on the work opportunities for not just us, but for truck drivers, warehouse workers and logistics teams,” he said.

The slowdown in activity at the ports of L.A. and Long Beach has also spread into surrounding communities. Businesses in the area rely on a robust community of port workers to frequent their establishments.

“We’re starting to hear from small businesses and restaurants in the harbor area that their customer patronage is trending downward,” Seroka said. “Outside of COVID, this is the biggest drop I’ve seen in my career.”

Early this year, private equity firm Blackstone bet big on the future of artificial intelligence by investing $300 million in a Chatsworth company that’s been around for more than two decades.

The company, DDN, helps businesses store and manage the massive trove of data that powers AI systems — the lifeblood needed for chatbots, self-driving cars and more. DDN’s high-profile customers include chipmaker Nvidia, Elon Musk’s AI startup xAI, Google Cloud and Ford. DDN, short for DataDirect Networks, has roughly 1,000 employees.

“They have a trillion dollars of assets under management, and it’s a company that we thought would really move the needle for us in terms of extending our reach,” said Jyothi Swaroop, DDN’s chief marketing officer.

The investment was among the largest this year in the Greater Los Angeles region, which remains a hot spot for investments in both old and new tech companies poised for growth.

All told, venture capital investors and private equity firms poured $3.1 billion to fund 144 deals in the L.A. area in the first quarter of this year, up 15% from a year ago, according to research firm CB Insights. The area encompasses Los Angeles, Ventura, Orange, Riverside and San Bernardino counties.

While investment levels can fluctuate, funding in the greater L.A. region has steadily increased since 2023, when investment cooled following the collapse of the cryptocurrency exchange FTX.

Along with AI, investors also financed startups and established businesses in healthcare, e-commerce and defense technology, underscoring how investment in the L.A. market has diversified in recent years beyond ad tech businesses and video apps.

“Today it’s going into much more ambitious projects,” Mark Suster, a general partner at Santa Monica-based Upfront Ventures. “It’s going into satellites, alternate energy, national defense, drones, shipbuilding and pharmaceutical drug discovery. So it’s a lot more exciting than it ever has been.”

Los Angeles-area companies that received the most money in the first quarter include Torrance-based defense company Epirus with $250 million; and Thousand Oaks-based Latigo Biotherapeutics, which received $150 million, according to CB Insights. Latigo Biotherapeutics develops non-opioid pain treatments, while Epirus makes technology that helps defend against attacks from drone swarms.

Economic consulting firm Econic Partners raised the most funding with $438 million, according to CB Insights, which relied on a report filed with the U.S. Securities and Exchange Commission. Econic disputed the total, saying it raised nine figures in the first quarter, but the company declined to say how much.

Masha Bucher, founder and general partner at Day One Ventures, said she views El Segundo as the most promising hub for “deep tech” startups tackling complex issues, such as, water scarcity.

Businesses in the L.A. area have access to a highly qualified workforce from aerospace and defense tech companies. The tech hub known as Silicon Beach also is close to the airport, making it easy for entrepreneurs to hop on a plane to raise funding in San Francisco.

“There is a power of community, and it’s definitely like a power spot on the map,” Bucher said. The firm’s investments include various AI startups and an eye-scanning crypto project backed by OpenAI’s Sam Altman in which people verify they’re human.

Investors aren’t interested in only AI, however. Culver City-based Whatnot raised $265 million, one of the biggest deals in the L.A. area this year. The live shopping app allows people to buy and sell items such as clothing and collectibles. Potential customers can ask questions about products in real-time, find deals and bid for products shown in live videos.

Whatnot says it surpassed more than $3 billion in sales in 2024, and the company expects that figure to double this year. The startup, founded in 2019, says it isn’t profitable yet, but the TikTok rival has shown investors it’s growing fast.

“Live and social shopping has the potential to be an absolutely monstrous market,” Whatnot Chief Executive Grant LaFontaine said.

The company has roughly 750 employees across the United States and Europe. The funding will help market Whatnot to attract more users and hire people to improve the shopping experience, he said.

Like other businesses, Whatnot uses AI for customer service and to moderate content on the platform.

“I tend to be sort of a purist, which is that consumers don’t care about AI. They care about problems being solved,” LaFontaine said.

Businesses have been using AI long before the rising popularity of chatbots such as ChatGPT that can generate text, images and code.

But the frenzy surrounding what’s known as generative AI has meant that various industries are confronting how technology will disrupt the way they live and work.

Not surprisingly, investor interest in AI drove much of the nation’s venture capital commitments in the first quarter. San Francisco-based OpenAI secured the largest funding round of $40 billion, placing its valuation at $300 billion, according to CB Insights.

“There’s a ton of opportunity to rewrite the playing field on which people do business in everything from across verticals, across industries,” said Jason Saltzman, head of insights for CB Insights. “Everyone recognizes the promise, and … no one wants to miss out on the promise.”

Globally, $121 billion of venture capital was raised in the first quarter, with 20% of the deals received by AI companies — the highest amount ever, according to CB Insights. Nationally, $90.5 billion in venture capital was raised last quarter, with the bulk of the money going toward startups in Silicon Valley, which brought in $58.9 billion, the research firm said.

San Francisco has experienced a surge in AI startups expanding or opening up offices, drawn to the city’s swath of talent and the Bay Area’s universities. AI leaders including OpenAI and Anthropic also are based there.

OpenAI said it would use the money raised in the first quarter toward building its tools and investing in talent.

“People understand that this is a transformative technology,” said Chris Lehane, OpenAI’s vice president of global affairs in an interview. “It’s going to permeate virtually every aspect of life.”

Silicon Valley remains the far leader in venture capital AI investments, but other cities such as New York have attracted AI funding. There’s also global competition from countries such as China. As legislators weigh whether to introduce laws that could regulate AI, some tech lobbying groups have raised concerns on how those bills could affect innovation in the state.

Suster said he doesn’t think venture capital dollars will leave California.

“The opportunity set is so great here,” Suster said. “Do we occasionally get backwards-looking bills that try to overregulate how industry works in California? Of course, we do. We find ways to work around them.”