Los Angeles County is suing State Farm General Insurance Co. and subsidiary State Farm Mutual Automobile Insurance Co. for purportedly mishandling claims stemming from the devastating 2025 Eaton and Palisades Fires.
The 107-page lawsuit, filed Aug. 31, alleges that State Farm committed "systemic, willful and widespread violations of California consumer protection laws." Los Angeles County said State Farm abandoned policyholders through delays and stalling after the wildfires, refused to test toxic homes, rotated adjusters, "drastically" lowballed loss estimates, inappropriately capped payment of living expenses and misrepresented policy language.
A spokesperson for State Farm said the insurer "strongly disagrees with the Los Angeles County's characterization of our wildfire claims response." State Farm "cooperated fully" with the California Department of Insurance's review of its response to the fires, the spokesperson said in an email. The insurer will review the lawsuit and "respond through the appropriate legal process."
State Farm under scrutiny
Roughly 11,300 State Farm policyholders filed homeowner claims stemming from the those 2025 wildfires, according to the California Department of Insurance's claims tracking.
"Through its advertising, website, policy documents and agents, State Farm represented that it would provide timely, thorough, and full-value coverage for covered losses," the lawsuit reads. "Instead State Farm maintained claims practices that systemically delayed, suppressed, denied and minimized payments, practices incompatible with the coverage it sold."
The lawsuit seeks to recover restitution for all homeowners insurance premiums State Farm collected during a limitations period for policyholders impacted by the wildfires. Los Angeles estimated that would come to at least $160 million.
A survey conducted by independent nonprofit recovery organization Department of Angels, which was launched in the aftermath of the fires, states that State Farm produced the "worst reported claims experiences" of any responding insurer as measured by severity and volume of policyholder complaints.
State Farm had already been in the crosshairs of the state insurance regulator, which in a market conduct examination found hundreds of claims handling violations. California Insurance Commissioner Ricardo Lara in May said he was taking enforcement action against State Farm millions of dollars in penalties and asking the insurer to speed up payments and resolve any outstanding claims.
The spokesperson for State Farm also said the insurer's "focus remains on helping customers recover." The spokesperson pointed out that State Farm has paid more than $6.2 billion on claims from the 2025 wildfires in Los Angeles and has closed roughly 78% of claims.
"We continue working directly with customers whose claims remain open and evaluating each claim based on the facts of the loss and the coverage provided by the customer's policy," the spokesperson said.
