Los Angeles County has launched an investigation into State Farm’s handling of insurance claims, amid widespread complaints from policyholders impacted by the January Eaton and Palisades fires, county officials announced on Thursday, Nov. 13.
The County Counsel’s investigation is focusing on “potential violations” of California’s Unfair Competition Law, according to the county’s announcement.
It comes on the heels of growing complaints from residents about delays, underpayments, and denials of legitimate wildfire claims.
Officials said Thursday that the county has formally notified State Farm — the largest insurer in the state — to cease “any unlawful or unfair business practices.”
“Altadena residents have already endured unimaginable loss and they shouldn’t have to fight their own insurance company to recover,” L.A. County Board of Supervisors Chair Kathryn Barger said in a written statement announcing the investigation. “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.”
Last week, Eaton and Palisades fire survivors formally called for California Insurance Commissioner Ricardo Lara to resign after a report revealed what it said were loopholes in a 2023 plan that resulted in more policyholders being dropped ahead of January’s disasters.
The survivors, from the Eaton Fire Survivors Network, gathered at Good Neighbor Bar in Altadena, where they sounded off on the New York Times report, which detailed how the deal between Lara and insurers changed the insurance landscape. Along with the call for Lara’s job, they requested immediate aid from Newsom as they navigate recovery and face barriers from insurers.
Some railed on State Farm, which with more than 2.8 million residential and commercial policies statewide, is California’s largest private insurer.
Jill Spivack, a Palisades resident whose home burned in the fire, said she’s been a loyal State Farm customer for the past 25 years. She thought their loyalty to State Farm would protect them during the recovery process.
“We trusted their promise to help us rebuild, like a good neighbor,” said Spivack. “But what we faced instead is confusion, lowball estimates and a delay at every turn.”
Eaton Fire Survivors Network Executive Director Joy Chen said that fire survivors’ experience is “a warning for every Californian who pays insurance premiums and expects the companies that they’ve been paying for 20 or 30 years to honor their contracts.”
On Thursday, she touted county’s response as a major step forward.
“For months, survivors have pleaded with the state to act,” she said. “The EFSN has documented over 400 firsthand accounts from Eaton and Palisades fire families that reveal a clear pattern of misconduct by State Farm. We brought together elected leaders from across Los Angeles to call on Commissioner Lara to stop illegal delays and denials. Yet he has failed to take meaningful action. As a result, a staggering 70% of insured Los Angeles fire survivors report that delays and denials are derailing their recovery.”
County officials said third-party surveys have found frustration with State Farm’s treatment of claims, with many leading to undue claim delays and underpayments, even denials.
Some say it has slowed the process of rebuilding in the area, as many have had a hard time starting that process without their claims being resolved.
“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,” according to the county’s announcement.
In a February release, State Farm officials said “we look forward to working alongside regulators, policymakers and industry leaders on creating a sustainable insurance environment in California – one that balances risk and increased rates, ensures long-term market stability and allows insurers like SFG to remain a vital part of California’s future.”
But local officials said part of the process is the insurer’s duty to pay out its claims.
“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 in a statement. “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.”
This is a developing story. Check back for updates.