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LOS ANGELES — California’s top insurance regulator says the state is seeking millions of dollars in penalties from State Farm after an investigation found the insurance company violated state law while handling claims from the 2025 Los Angeles-area wildfires.
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Insurance Commissioner Ricardo Lara said Monday that State Farm violated the law hundreds of times.
Lara launched the investigation last June after survivors of the Palisades and Eaton fires said that the state’s largest home insurer was delaying and mishandling claims regarding damage to their homes and possible contamination from smoke.
“Our investigation found that State Farm delayed, underpaid, and buried policyholders in red tape at the worst moment of their lives. That is unacceptable, and we are taking decisive action to hold them accountable,” Lara said in a statement.
The two fires were devastating – they led to the deaths of 31 people and destroyed more than 16,000 structures.
RELATED: LA County launches State Farm probe following Eaton, Palisades fires
The department looked at 220 random claims filed to State Farm and found nearly 400 violations. They included underpayment and slow or inadequate claim processing. State Farm received more than 11,000 claims from the Los Angeles wildfires, accounting for roughly a third of all claims filed, state officials said. The department said thousands of people might be affected by the unlawful behaviors.
The final amount of penalties will be recommended by an administrative judge and finalized by Lara.
State Farm is the second insurance company to face legal actions from the state over its handling of LA fire claims. The department is also seeking remedies against the FAIR Plan for denying smoke damage claims. The plan is an insurance pool that all the major private insurers pay into, and the plan then issues policies to people who can’t get private insurance because their properties are deemed too risky to insure.
State Farm didn’t immediately respond to request for comment.
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