California Insurance Department Investigates State Farm Over LA Fire Survivors’ Smoke Damage Claims
The California Insurance Department is investigating State Farm’s handling of smoke damage claims from survivors of the Los Angeles-area fires. The probe comes as the insurer awaits approval for an emergency rate hike.
Rossana Valverde’s Pasadena home, where she has lived for 35 years, still stands after the devastating January fires in Los Angeles County. However, more than 100 days later, she and her husband are still unable to return home. They are waiting for State Farm to approve and process their claims.
“We were lucky our house made it through,” Valverde said. “At first, we thought we were unscathed. But it definitely still smells like smoke. The windowsills have a thick layer of black ash and soot.”
After testing their home for toxins, they discovered high levels of arsenic, lead, and nickel. The estimated cost for cleaning, repairing, and replacing their hardwood floors, carpet, appliances, and other damaged items totals over $300,000.
So far, Valverde and her husband have received about $40,000 from State Farm, but they are struggling to get the insurer’s adjuster to respond promptly to their requests for more. Valverde is not alone in her experience. Multiple complaints, including a lawsuit, have been filed against State Farm regarding delayed or denied claims after the LA-area fires, particularly related to smoke damage.
State Sen. Sasha Renee Perez, a Democrat representing Pasadena, told CalMatters that her constituents have been good customers who “feel like they’ve been left in the cold.”
Insurance Commissioner Ricardo Lara sent a letter to State Farm’s CEO, Dan Krause, asking for details on how the company is handling claims. Lara requested a copy of the insurer’s standards for reviewing, investigating, and processing smoke damage claims and asked State Farm to commit to providing at least 75% of contents coverage without requiring an inventory from fire survivors.
State Farm spokesperson Sevag Sarkissian responded by email, stating, “We’re here to help our customers recover and we empathize with those who are rebuilding their lives. We’ve received approximately 12,500 total claims related to the fires and have paid over $3.12 billion to our customers.”
Attorney Amy Bach, president of United Policyholders, a nonprofit organization advocating for insurance customers, said that smoke damage has been part of “a longstanding fight.” Bach advises policyholders to have their homes tested by an industrial hygienist before cleaning and to try to get compensated afterward if the insurer initially refuses to pay.
Other fire survivors, such as Andrew Wessels and Gail Jamentz, have also experienced delays from State Farm. Wessels and his family have had to rely on temporary housing for months, while Jamentz struggled to get State Farm to declare her home a total loss.
The investigation into State Farm’s handling of claims may impact the company’s request for a rate increase. Lara stated that he is balancing all the facts and will move accordingly after reviewing State Farm’s response.
