Los Angeles County has filed a lawsuit against State Farm General, accusing the insurer of illegal and deceptive business practices in handling claims related to last year’s Palisades and Eaton wildfires. The suit, announced Monday, alleges that State Farm delayed, denied, or underpaid claims, preventing fire victims from receiving the full benefits to which they are entitled under their policies.
County officials, after investigating numerous complaints, reported systematic underpayments and unreasonable delays in claim processing. The lawsuit also accuses State Farm of unlawfully suppressing claims for smoke damage. “Survivors are just asking for what’s right,” said L.A. County Supervisor Kathryn Barger, who represents Altadena, during a news conference.
State Farm responded through a company spokesperson, Bob Devereux, who stated the insurer disagrees with the county’s characterization of its claims handling. Devereux noted that State Farm has paid more than $6.2 billion related to the fires, including approximately $1 billion for smoke damage claims, and that about 78% of claims have been closed. He emphasized that the company is continuing to work directly with policyholders whose claims remain open, assessing each based on the facts and policy coverage.
The lawsuit, filed in Los Angeles County Superior Court, reflects complaints collected by county investigators as well as advocacy groups such as the Every Fire Survivor’s Network. Joy Chen, executive director of that organization, said many fire victims with State Farm policies reported receiving insufficient support in the aftermath of the wildfires. Chen described insurance for these families as “a barrier to recovery” rather than a safety net, with some still struggling 19 months after the fires.
During the county’s investigation, officials reviewed complaints from hundreds of policyholders and noted that State Farm failed to fully comply with requests for documents and information. As California’s largest private insurer, with over 2.8 million residential and commercial policies, State Farm faces significant scrutiny amid these allegations. According to the California Department of Insurance, 11,300 State Farm policyholders filed homeowner claims tied to the wildfire events.
Among the grievances highlighted are State Farm’s refusal to conduct comprehensive testing for smoke-related toxins in affected homes, and allegations that the company drastically undervalued losses. One family cited by the county said they were offered $11,000 to remediate smoke damage in a five-bedroom house, an amount they said represented only 13% of the actual cost.
The lawsuit seeks full restitution for policyholders and civil penalties for violations of state law, demanding State Farm honor its contractual obligations after decades of premium payments by insured residents.