LOS ANGELES, Calif. — California’s Department of Insurance has launched a formal investigation into State Farm, the state’s largest home insurance provider, over how it handled claims related to the devastating January wildfires in Los Angeles County.
The probe, officially called a market conduct examination, will scrutinize the insurer’s compliance with consumer-protection and claims-handling laws, Insurance Commissioner Ricardo Lara announced Thursday.
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- 1 Wildfire Survivors Report Delays, Reassignments, and Smoke Damage Disputes
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- 3 History of Corrective Action Following Wildfire Investigations
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“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,” said Commissioner Lara in a public statement.
Wildfire Survivors Report Delays, Reassignments, and Smoke Damage Disputes
The investigation follows mounting pressure from both lawmakers and fire survivors, particularly residents of Pasadena and Altadena, who say they’ve experienced months of frustration, including:
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Significant delays in payment of claims
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Repeated reassignment of adjusters — in some cases, four or more per household
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Difficulty obtaining reimbursement for smoke damage and toxic contamination
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Inconsistent claim management and poor record-keeping
One such resident, Andrew Wessels, whose Altadena home suffered extensive smoke and lead damage from the Eaton Fire, told CalMatters he’s still waiting on $25,000 in reimbursements, and has not filed additional claims because “it seems futile.”
“I’m happy to hear the commissioner has chosen to look deeper,” Wessels said. “But I’ll believe stuff when I see it.”
His family, including two children, has lived in seven different places since the fire.
State Farm Responds, Claims Majority of Customers Are Satisfied
In a statement Thursday, State Farm spokesperson Sevag Sarkissian said the company is cooperating with the state’s review.
“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,” Sarkissian said.
The company reports having paid more than $3.96 billion on over 12,000 wildfire-related claims across California as of this week.
However, the California Department of Insurance says it has received hundreds of complaints, many involving State Farm, and continues to urge affected customers to submit detailed grievances to aid the ongoing investigation.
History of Corrective Action Following Wildfire Investigations
Insurance department spokesperson Michael Soller explained that similar market conduct investigations in past fire seasons — including those in 2015 and 2017 — resulted in nearly $158 million in additional claim payouts after insurers were ordered to correct problematic practices.
Such reviews often reveal systemic issues, including mismanagement, improper denials, or delayed claims processing, especially in the aftermath of large-scale natural disasters.
Rate Hikes Add to Consumer Frustration
The investigation also comes on the heels of State Farm receiving approval to increase premiums for California homeowners — with additional rate hikes pending. Consumer advocates say this compounds the burden for those already struggling to recover from fire-related losses.
Commissioner Lara emphasized that regulatory oversight is essential to ensure insurers follow through on promises made to policyholders in times of crisis.
