Every Fire Survivor’s Network (EFSN), made up of more than 10,000 Eaton and Palisades fire survivors, is asking the California Department of Insurance (CDI) for the right to conduct discovery, cross-examine witnesses, and join in settlement discussions in the enforcement proceeding against State Farm General Insurance Company
Eaton and Palisades fire survivors want the right to directly advocate for remedies that will help them rebuild and return home, after 18 months of what they said are documented patterns of claims-handling misconduct by State Farm.
“State Farm has insured over 20% of Eaton and Palisades fire survivors,” said Joy Chen, executive director of Every Fire Survivor’s Network, speaking in front of Palisades Charter High School in Pacific Palisades on Thursday, June 19.
“It is the biggest player in the market, and according to our data and according to Commissioner Ricardo Lara in his Zoom webinar with us, State Farm garners the most complaints of any insurer,” Chen said. “When the largest player in the market systemically does not fulfill its contracts, that has a depressing effect on the entire market. So in that sense, State Farm’s misconduct in this recovery is holding back the entire Los Angeles recovery, and it puts every Californian at risk.”
If the petition to intervene is granted, the survivors’ group could establish a precedent for how wildfire survivors participate in regulatory proceedings and how insurers handle catastrophe claims across California for years to come, Chen added.
EFSN is also asking that hearings be held in Los Angeles, “where the harm happened and where survivors can participate,” network leaders said. It is also calling for reopening and reviewing all Eaton and Palisades fire claims.
Chen noted that the group had invited Axel Del Cid, newly appointed as State Farm’s Los Angeles recovery executive, to hear directly from wildfire survivors about their recovery and what it means to be a “good neighbor.”
An empty chair bearing a sign reserved for Del Cid and displaying the State Farm logo was placed beside the podium.
“This chair stands for the ‘Good Neighbor’ that no-showed when its policyholders needed it most,” Chen said.
In a statement, State Farm said it is aware of the petition.
“We recognize that many wildfire survivors, including those that are State Farm General policyholders, continue to face difficult recovery challenges. Our focus remains on helping customers recover. State Farm General has paid more than $5.9 billion on Eaton and Palisades wildfire claims and remains committed to supporting customers as they rebuild and recover.”
Deputy Commissioner Michael Soller said the CDI is acting with urgency “to assist wildfire survivors in their ongoing recovery by investigating formal complaints filed by survivors and conducting the expedited market conduct exam that led to this enforcement action.”
The department explained that the enforcement proceeding was not brought under Proposition 103, and the Administrate Procedures Act does not authorize intervention requests to the commissioner or department staff in this type of action.
“Any questions about participation or intervention would be decided by the hearing officer or administrative law judge assigned to the case,” the department said in a statement. No hearing officer or administrative law judge has been assigned to the case.
Diane Brigham, 69, lost her home of 30 years in the Palisades fire. She and her husband were diligent, premium-paying State Farm customers for at least 40 years, she said.
Brigham recounted creating an inventory of every item lost to the fire, from dishes and pots and pans, to the food in the freezer, her wedding dress, their art books, and even the number of socks and running shoes in her husband’s closet, requiring each item’s condition, age and current value.
Brigham said she even submitted a sample inventory that State Farm confirmed met its requirements, later turning in a list of 8,153 items whose value exceeded their policy limits.
“It’s been a tedious and draining job as we relive the trauma of the things we lost,” Brigham said. “Meanwhile, State Farm repeatedly urges us to get going on our rebuild. But it’s their own convoluted processes that have slowed us down.”
After delays from State Farm saying it could no open links and attachments, as well as requests for yet additional documentation, the Brighams said they received a response that contained numerous errors and unreasonable depreciations favoring the company.
“Our claims handler could not clearly explain State Farm’s calculations that were used to conclude we still had not met our personal property policy limit,” Brigham said. “The delays, opaque calculations, and antiquated systems appear to actually be designed to confuse and wear out customers like me, so that we give up and settle for less.”She likened the experience to death by a thousand cuts.
“What began as seemingly minor bureaucratic hurdles has become a new disaster for us, uncertainty about how much money we actually have available to rebuild,” Brigham said.
The couple’s experience is one of many documented delays, denials, lowball estimates, revolving-door adjusters, and other barriers to recovery EFSN has documented tied to State Farm.
Attorney Michelle Meyers, a partner at the law firm Singleton Schreiber, is working pro bono with Will Pletcher, litigation director at the consumer protection nonprofit Consumer Watchdog on the petition.
Meyers said the CDI’s Market Conduct Examination auditing State Farm operations found 398 violations across 52% of a random sample of just 220 State Farm fire claims, an average of 3.49 violations per claim. State Farm acknowledged the underlying facts in most cases but argued the violations were administrative errors rather than a general pattern of misconduct.
The CDI is pursuing a $2 to $4 million fine against State Farm.
“The CDI found the violations, and State Farm admitted the underlying facts,” Meyers said. “What has been missing from this proceeding is the voice of the people who actually experienced the harm. EFSN’s intervention changes that. We will introduce expert statistical evidence showing the 220-claim sample likely understates the total violation count by an order of magnitude, and we will press for a penalty structure that reflects the harm State Farm actually caused and at the scale it actually did it, not a $2 million fine against a $270 billion company.”
Lara has 15 days to approve or deny the petition, Meyers said. Lara, who has served two terms as commissioner and is termed out, will be replaced by either Jane Kim, former member of the San Francisco Board of Supervisors, or state Sen. Ben Allen, both Democrats who are on the ballot for the job in November.
EFSN has called for Lara’s resignation, criticizing him for not enforcing state laws and undermining Californians’ confidence that they can count on the insurance coverage they pay for. As a nonprofit, it cannot endorse any candidate.
“What I would say is that we are looking for our next insurance commissioner to act with integrity,” Chen said. “To act on behalf of the people and to aggressively ensure that California’s laws are enforced. We want a commissioner who will both enforce the laws, hold insurers accountable, and also make insurance available to every Californian.”
Former California Insurance Commissioner Dave Jones, who preceded Lara in office, called the petition “serious, substantive, and timely.”
“Survivors who lived through the violations identified in this examination have every right to participate in the proceeding that will determine its outcome,” Jones said in a statement. “I strongly support their effort to be heard.”