Los Angeles County announced Wednesday that County Counsel has launched an investigation into State Farm's handling of insurance claims filed by policyholders affected by the January 2025 Eaton and Palisades fires.
The investigation focuses on potential violations of California's Unfair Competition Law and follows growing complaints from residents about delays, underpayments and denials of legitimate wildfire claims. County Counsel has formally notified State Farm that if it is engaging in any unlawful or unfair business practices, the company must immediately stop such conduct and come into full compliance with state laws and regulations.
"Altadena residents have already endured unimaginable loss and they shouldn't have to fight their own insurance company to recover," said Los Angeles County Board of Supervisors Chair Kathryn Barger. "The County has heard loud and clear from wildfire survivors that State Farm's delays are standing in the way of rebuilding. Fair and timely insurance payments aren't a privilege; they're a right. State Farm must act quickly so survivors can rebuild their homes and their lives."
The county's action comes nearly a year after the devastating wildfires that killed dozens and destroyed thousands of structures in Los Angeles County. State Farm — California's largest private insurer with more than 2.8 million residential and commercial policies statewide — has faced tens of thousands of homeowner, auto and business claims from fire victims.
Many wildfire survivors have shared stories of frustration in dealing with State Farm. Homeowners whose houses didn't burn down but were rendered uninhabitable by smoke contamination say the insurer has been stingy about paying for proper cleaning and repairs. Survivors reported being shuffled between multiple adjusters, having calls and emails go unanswered, and receiving inadequate or lowball settlement offers far short of actual repair costs.
According to an October 2025 survey by Embold Research for the nonprofit Department of Angels, State Farm customers have had far worse experiences than customers of other insurers, reporting much 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.
"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," said Supervisor Lindsey P. Horvath. "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."
The scope of County Counsel's investigation includes whether State Farm failed to timely respond to communications from claimants or timely accept or deny claims. State regulations require insurers to respond to communications from claimants within 15 days and accept or deny claims within 40 days of receiving proof of claim.
Investigators are also examining whether State Farm engaged in a practice of switching adjusters assigned to a claim in a manner that resulted in delays and unfairly burdened policyholders in violation of its obligations to timely process claims and to diligently conduct thorough, fair and objective investigations of claims.
Other areas of investigation include whether State Farm misrepresented policy language or the terms or scope of coverage to claimants, failed to provide compensation for reimbursement for living expenses for up to 36 months from the date of the covered loss as required by law, and failed to disclose repair, remediation or replacement estimates or other documents upon claimant's request in violation of its obligation to disclose such documents within 15 days of a request.
County Counsel is also investigating whether State Farm failed to pay for testing for or otherwise reasonably investigate claims of smoke damage and to compensate claimants for remediation of smoke damage in violation of its obligations to conduct thorough, fair and objective investigations of claims and to effectuate settlements of claims where liability is reasonably clear.
County Counsel Dawyn R. Harrison said, "We are committed to thoroughly investigating State Farm's actions and making sure they are treating claimants fairly and resolving their claims quickly and in full compliance with the law."
County Counsel is empowered by statute to investigate and prosecute violations of the Unfair Competition Law on behalf of the People of the State of California and seek restitution, civil penalties and injunctive relief for any violations.
In a letter dated Wednesday to State Farm Senior Vice President and General Counsel Keesha-Lu Mitra, County Counsel requested that the company produce documents related to the January 2025 wildfires, including records tracking insurance claims, claims-handling policies and procedures, and any updates made to those policies after Jan. 7, 2025. The letter also requests all documents provided to the California Department of Insurance in connection with its Market Conduct Examination of State Farm announced on June 12, 2025.
The county is seeking State Farm's cooperation on an expedited basis and has requested that the company respond no later than Nov. 20, 2025.
The county's investigation adds to mounting regulatory and legal scrutiny of State Farm's wildfire claims handling. In June, California Insurance Commissioner Ricardo Lara ordered a formal market conduct examination of State Farm's wildfire claims handling, citing troubling patterns such as frequent reassignment of adjusters, inconsistent claim management and poor communication continuity.
State Farm also faces legal challenges stemming from the wildfires. In June, a group of homeowners sued the insurer for allegedly scheming to leave customers underinsured. The lawsuit claims State Farm deliberately underestimated home replacement costs in its policy quotes to offer cheaper premiums and capture market share at the expense of adequate coverage.
State Farm maintains that it has acted in good faith and that an overwhelming majority of wildfire claimants are satisfied with State Farm's service. The company says it is committed to paying what it owes promptly, courteously and efficiently. State Farm points to the unprecedented scale of the disaster — the company has received roughly 13,000 fire-related claims and paid out over $4 billion so far — as context for the challenges.