Insurance
Home›Insurance›Property Insurance›Los Angeles County sues State Farm over wildfire claim…
Los Angeles County sues State Farm over wildfire claims handling
The county alleges State Farm delayed or denied payouts, including by withholding additional living expense payments and rotating adjusters across claims.
Los Angeles County has escalated its dispute with State Farm from an investigation to litigation, filing a lawsuit against the insurer over how it handled claims from the January 2025 Palisades and Eaton fires, as Insurance Business reports.
The complaint alleges State Farm General Insurance Company violated California's Unfair Competition Law by systematically delaying and denying payouts to policyholders, including through adjuster rotations, withheld additional living expense payments for temporary housing, misrepresentations that discouraged homeowners from pursuing valid claims, and failures to properly evaluate smoke damage in homes that remained standing.
County Supervisor Kathryn Barger said wildfire survivors have spent too long fighting to receive benefits they paid for. The suit follows a market conduct examination by the California Department of Insurance earlier this year, which alleged violations in more than half of the sample claims reviewed, reportedly involving upwards of 400 discrete violations tied to late responses, inconsistent adjusting decisions, and other claims-handling lapses.
Insurance Business reports the state action seeks what regulators described as the largest civil penalty after a wildfire disaster this century and could include authority to suspend State Farm's license to write new business in California for up to a year, with Monday's county case running on a distinct legal track.