SACRAMENTO, Calif. (AP) — California’s top insurance regulator has launched an investigation into State Farm’s handling of claims related to the January Los Angeles-area wildfires. The probe comes after survivors of the Palisades and Eaton fires accused the state’s largest home insurer of delaying and mishandling claims regarding damage to their homes and potential smoke contamination.
The wildfires destroyed thousands of buildings around Los Angeles, resulted in 30 deaths, and displaced thousands more. Insurance Commissioner Ricardo Lara stated that the investigation will examine whether State Farm complied with California’s consumer protection and claim-handling laws. “Californians deserve fair treatment from their insurance companies,” Lara said. “No one should face uncertainty, be forced to fight for what they’re owed, or endure endless delays that often lead consumers to give up.”
State Farm, which insures about 1 million homes in California, has received approximately 13,000 claims related to the fires and has paid out around $4 billion. The company expressed its commitment to supporting customers through the recovery process, stating, “We’re here to help our customers recover and we empathize with those rebuilding their lives.”
Survivors of the Eaton fire in Altadena raised concerns about potential lead, asbestos, and heavy metal contamination in their homes due to smoke. State Senator Sasha Renée Pérez called for the investigation in April, citing “financial and emotional hardships” faced by survivors due to State Farm’s alleged delays and denials of valid claims.
The Department of Insurance recently announced a task force to recommend best practices for addressing smoke damage. Kiley Grombacher of the California Fire Victims Law Center praised the investigation as a “critical step toward accountability,” stating that State Farm is “unjustly denying legitimate smoke damage claims, forcing families to choose between living in toxic homes or paying for remediation.”
The investigation comes as State Farm and other insurers have faced challenges operating in California due to wildfire risks. In 2023, State Farm stopped issuing new residential policies because of these risks. The wildfires further complicated matters, leading to regulatory changes and rate increases for State Farm customers.
