State Farm significantly mishandled claims filed by survivors of the 2025 Los Angeles wildfires, according to investigation by the California Department of Insurance, the results of which were announced Monday.
The investigation documented a pattern of unlawful behavior in more than half of the claims reviewed, Insurance Commissioner Ricardo Lara said in a statement.
State Farm policyholders filed about 11,300 residential claims related to the Los Angeles wildfires, nearly one-third of the 38,835 claims filed across all insurers, according to the Department’s claims tracker. The violations identified by the department indicate that thousands of survivors may have been affected.
“Wildfire survivors came to us for help, and we followed the facts,” Lara said. “Our investigation found that State Farm delayed, underpaid, and buried policyholders in red tape at the worst moment of their lives.”
The department’s enforcement action seeks millions of dollars in penalties, considered the largest amount pursued this century following a wildfire disaster, Lara said, addition in to penalties, the department is requiring State Farm to take corrective actions to speed up payments and resolve outstanding claims
“The Los Angeles fires were one of the most destructive disasters in our state’s history,” he said. “Survivors deserve a fair, timely recovery, not obstacles and delays.”
Laren said the department is taking a two-pronged approach: legal action to address State Farm’s conduct, and legislative action to ensure this doesn’t happen again.
Investigation finds a pattern of delay and denial of claims
Department examiners reviewed a sample of 220claims and found 398 violations of state law in 114 of those claims, many of which contained multiple violations. Major violations mirror the delays and denials reported by wildfire survivors to the department, including:
- Slow and inadequate investigation: State Farm failed to begin investigating claims within 15 days, failed to accept or deny claims within 40 days, and failed to pay accepted claims or provide written notice of the need for additional time within 30 days, as required by law.
- Underpayment of claims: State Farm made unreasonably low settlement offers and underpaid claims.
- Multiple adjusters causing confusion: State Farm failed to assign adjusters within statutory timelines and reassigned adjusters repeatedly, creating what survivors described as “adjuster roulette.”
- Smoke damage claim denials and delays: Smoke damage claims represented nearly half of all consumer complaints. Examiners found that State Farm failed to provide required written denials for hygienist and environmental testing, misclassified testing costs, and misrepresented policy provisions related to inspections.
- Inadequate communication: State Farm failed to respond to policyholders, send required status letters, or provide notice when additional time was needed to determine claims.
Since last January, the department has recovered more than $280 million from all insurance companies for survivors of the Eaton and Palisades fires through direct intervention. As of March 3, 2026, insurers have paid more than $23.7 billion to residential, commercial, and auto policyholders impacted by the fires.
Legal action to help survivors now
The department has filed an order against State Farm – the first step toward a public hearing before an administrative law judge.
Wildfire survivors experiencing delays, disputes, smoke damage issues, or other claim problems can file a formal complaint with the department at insurance.ca.gov or by calling800-927-4357.
Photo: Sgt. 1st Class Jon Soucy
