Los Angeles County has launched an investigation into State Farm, the largest insurer in California, over its handling of insurance claims related to the January 2025 Eaton and Palisades wildfires. The probe, announced on Thursday, comes after numerous complaints from residents about delays, underpayments, and denials of claims. The investigation will focus on potential violations of California’s Unfair Competition Law, which mandates fair business practices.
County Supervisor Kathryn Barger emphasized the urgency of the situation, stating, “Altadena residents have already endured unimaginable loss, and they shouldn’t have to fight their own insurance company to recover.” Residents like Jesse Albert, whose home was destroyed in the Eaton Fire, have reported receiving significantly lower payouts than needed to rebuild. Albert claims State Farm told him he had reached his policy cap, despite prior assurances that his coverage was sufficient.
According to ABC7, the County Counsel has formally notified State Farm to cease any unlawful practices immediately. The investigation also seeks to determine if State Farm has violated state insurance laws by failing to provide timely responses and adequate compensation for claims.
A survey by Embold Research highlighted widespread dissatisfaction among State Farm customers compared to other insurers. The survey found higher rates of claim denials, lowball estimates, and poor communication. As reported by Metropolitan News-Enterprise, the County Counsel’s office is authorized to seek restitution and civil penalties if violations are found.
State Farm has responded by stating that the investigation is a distraction from their ongoing efforts to assist customers. The company claims to have paid nearly $5 billion to California customers affected by the wildfires and continues to work with officials to improve the insurance market.
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