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California Launches Inquiry Into State Farm’s L.A. Wildfire Claims

Survivors reporting lengthy delays alongside inconsistent handling have prompted Ricardo Lara to assess whether State Farm breached consumer protection laws.

A State Farm sign hangs onto the remains of building destroyed by the Eaton Fire in Altadena in Los Angeles County on Feb. 3. The California Department of Insurance will look into customer complaints about State Farm's claims processing in the wake of the fires.
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A home destroyed by the Palisades Fire in Pacific Palisades on Tuesday, June 3, 2025.(Photo by Hans Gutknecht, Los Angeles Daily News/SCNG)
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Overview

  • State Farm General has received over 12,800 claims from the January Los Angeles fires and paid more than $3.85 billion to California customers, with estimated total wildfire losses at $7.6 billion.
  • The Department of Insurance’s market conduct examination will assess whether State Farm complied with California’s consumer protection and claims handling laws, potentially leading to fines or mandated operational reforms.
  • Hundreds of policyholders in Pasadena, Altadena and surrounding areas filed complaints citing delayed payments, frequent adjuster reassignments and inconsistent decisions on similar claims, particularly for smoke damage.
  • Previous market conduct reviews of insurers after the 2015 and 2017 wildfires produced about $158 million in additional claims payments, illustrating the examination’s potential impact.
  • State Farm said it is cooperating with the inquiry, highlighted its $3.85 billion in payouts and noted regulators approved a 17% emergency rate increase for its California homeowners this month.