LA County Launches Investigation into State Farm Over Wildfire Claims

Los Angeles County is conducting an investigation into State Farm’s handling of insurance claims from the devastating L.A. wildfires in January.

The investigation was ordered by the L.A. County Board of Supervisors, and it focuses on potential violations of California’s Unfair Competition Law. It addresses consumer complaints of delays, underpayments, and denials of legitimate claims, according to an announcement from the county.

L.A. County Counsel formally notified State Farm that if it is engaging in any unlawful or unfair business practices, the carrier must immediately stop the conduct and come into full compliance with state laws.

State Farm is California’s largest homeowners insurer. The carrier got approval for a 17% rate increase following billions of dollars in losses from the L.A. wildfires and a pullback on writing new policies in the state. State Farm upped its rate request in May.

The county announcement refers to an October 2025 survey by Embold Research for the nonprofit Department of Angels that shows State Farm customers had worse experiences than customers of other insurers, reporting higher rates of claim denials, lowball claims estimates, poor communication and multiple adjusters being assigned to their claims.

“The survey noted the urgent need to resolve claims quickly as displacement coverage will be running out soon for many survivors who must either return home or find other housing,” the announcement states.

A State Farm spokesperson issued the following statement in response to the investigation:

“The goals of this investigation are unclear but what is clear is that it will be another distraction from our ongoing work in California to help our customers recover from this tragedy. State Farm is committed to paying customers what they’re owed. We’re handling over 13,500 claims and have paid almost $5 billion to California customers affected by the January wildfires. Nearly 200 Claims professionals are still on the ground, supported by teams nationwide, helping customers recover. We’re here every step of the way and working with elected officials to build a more sustainable insurance market in California.”

Consumer Watchdog called the investigation “a vital step to protect wildfire victims.”

“Many wildfire survivors have been waiting for nearly a year for help that hasn’t come,” Carmen Balber, executive director at Consumer Watchdog, said in a statement. “We’ve received voluminous complaints from consumers that their insurers—including State Farm—have delayed, tried to underpay, or outright denied their claims. The County’s investigation finally gives fire victims a chance at real accountability and relief.”

The wildfires, which destroyed 11,000 homes, put a spotlight on the state’s homeowners insurance crisis. In another brewing battle over the impact of the fires, a few of the victims of wildfires have asked California Gov. Gavin Newsom to call for the resignation of California Insurance Commissioner Ricardo Lara over reforms Lara pushed that were designed to help ease the state’s homeowners insurance crisis.

The calls for Lara’s resignation followed a New York Times article that an agreement between Lara and several insurers, intended to keep carriers from continuing to withdraw from the wildfire-prone state, enabled carriers to drop tens of thousands of policyholders ahead of the L.A. fires.

Insured losses for the wildfires are estimated to be between $30 billion to $40 billion. Several insurers, including State Farm, have reported paying more than $1 billion in claims.

“Los Angeles County residents have paid State Farm millions in premiums over many years, and the company has a clear obligation to honor its policies in full,” Supervisor Lindsey P. Horvath said in a statement. “Families who lost everything in the Palisades and Eaton Fires deserve fair and timely treatment — not delays, denials, or underpayments. It’s time for State Farm to live up to its commitment to be a ‘good neighbor’ and do right by its customers who have lost so much.”

Topics Catastrophe Natural Disasters Wildfire Claims Louisiana

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