California Insurance Department Investigates State Farm Over L.A. Fire Claims Handling
California’s Insurance Department has launched a formal investigation into State Farm’s handling of claims from survivors of the Los Angeles County fires. The investigation, expected to take several months, aims to determine whether State Farm has complied with California’s consumer-protection and claims-handling laws.
Insurance Commissioner Ricardo Lara announced the investigation, stating, “No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up.” The move comes after survivors of the January fires and lawmakers representing affected areas urged Lara to investigate the state’s largest property insurance provider.
Residents from Pasadena and Altadena have reported various issues, including delayed payments, multiple claims adjusters, and difficulties in getting reimbursed for smoke damage. The investigation will also examine inconsistent management of similar claims and poor record-keeping.
Andrew Wessels, an Altadena resident whose home suffered smoke damage and high levels of lead, expressed cautious optimism about the investigation. “I’m happy to hear the commissioner has chosen to look deeper,” Wessels said. “But I’ll believe it when I see it.” Wessels, along with his wife and two children, has been living in seven different places since the Eaton Fire. He is still waiting for at least $25,000 in reimbursements from State Farm and has not submitted further requests due to the challenges he has faced.
State Farm has responded by stating its cooperation with the investigation. “A fair review will find that thousands of State Farm customers are being helped by our teams on the ground in Los Angeles County and are very satisfied,” said Sevag Sarkissian, State Farm spokesperson. The company has paid over $3.96 billion on more than 12,000 claims by its California customers as of the latest update.
The insurance department is encouraging State Farm customers to continue submitting complaints as part of the ongoing investigation. Department spokesperson Gabriel Sanchez noted that they have received hundreds of claims related to the LA-area fires, with a significant number concerning State Farm.
Formal investigations by the insurance department, known as market-conduct examinations, have previously led to corrections in insurance companies’ practices. After wildfires in 2015 and 2017, investigations resulted in about $158 million more in claims being recovered for affected customers.
State Farm recently received approval for a rate hike for its California customers and is seeking additional rate increases. The investigation’s findings could have significant implications for the insurance company and its policyholders.
The department’s action demonstrates its commitment to ensuring that insurance companies comply with consumer-protection laws and handle claims fairly and promptly. As the investigation continues, affected policyholders remain hopeful for a resolution to their claims issues.
