• County opens investigation into alleged delays and underpayments after January’s devastating wildfires
• Probe focuses on possible violations of California’s Unfair Competition Law
• State Farm denies wrongdoing, says it has paid nearly $5 billion on 13,500 claims

Los Angeles County has opened an investigation into State Farm’s handling of insurance claims stemming from the catastrophic L.A. wildfires in January. Ordered by the Board of Supervisors, the probe zeroes in on potential violations of California’s Unfair Competition Law, following consumer complaints of delays, underpayments and denials of legitimate claims, according to a county announcement.

County Counsel has formally notified State Farm that it must immediately cease any unlawful or unfair business practices and bring its operations into full compliance with state law.

Concerns heightened by rate hikes, consumer survey

State Farm, California’s largest homeowners insurer, recently secured approval for a 17% rate increase after reporting billions of dollars in wildfire-related losses. The company subsequently raised its rate request again in May amid a broader pullback from writing new policies in the state.

The county pointed to findings from an October 2025 Embold Research survey, conducted for the nonprofit Department of Angels, showing State Farm customers reported worse experiences than policyholders with other insurers. Respondents cited higher levels of claim denials, lowball estimates, poor communication, and frequent reassignment of adjusters. The survey also warned of the growing urgency to resolve claims as displacement-cost coverage approaches expiration for many survivors.

State Farm pushes back

In a statement, a State Farm spokesperson questioned the purpose of the inquiry but said the insurer remains focused on helping customers recover.

“The goals of this investigation are unclear but what is clear is that it will be another distraction from our ongoing work in California to help our customers recover from this tragedy,” the spokesperson said. “State Farm is committed to paying customers what they’re owed. We’re handling over 13,500 claims and have paid almost $5 billion to California customers affected by the January wildfires. Nearly 200 Claims professionals are still on the ground, supported by teams nationwide, helping customers recover.”

Watchdog group calls probe “vital”

Consumer Watchdog hailed the county action as overdue, saying it reflects widespread frustrations among wildfire victims.

“Many wildfire survivors have been waiting for nearly a year for help that hasn’t come,” said Carmen Balber, the group’s executive director. “We’ve received voluminous complaints from consumers that their insurers—including State Farm—have delayed, tried to underpay, or outright denied their claims. The County’s investigation finally gives fire victims a chance at real accountability and relief.”

Wildfires intensify pressure on insurance system

The January wildfires destroyed roughly 11,000 homes and further strained California’s already fragile homeowners insurance market. In a separate dispute tied to the fires, several survivors have urged Gov. Gavin Newsom to request the resignation of Insurance Commissioner Ricardo Lara, criticizing reforms Lara advanced to stabilize the insurance sector.

What to do if you're affected

If your State Farm (or other insurer) wildfire claim is delayed or underpaid

1. Document everything
Keep copies of all correspondence, estimates, adjuster notes, receipts, photos, and itemized losses. Note dates and names of adjusters assigned.

2. Request a detailed written explanation
Insurers must provide the specific reason for any denial, delay, or low payout. California law requires clarity — not vague language.

3. Ask for a second inspection or re-estimate
You have the right to request a new adjuster and a fresh review, especially if adjusters have rotated or estimates appear inconsistent.

4. File a complaint with the California Department of Insurance
If progress stalls, submit a complaint online. DOI can intervene and often accelerates claims.

5. Contact L.A. County’s consumer protection offices
Given the new investigation, the county is actively collecting complaints. Documentation may become part of the inquiry.

6. Do not let coverage deadlines lapse
Additional living expense (ALE) coverage typically expires 12–24 months post-disaster. Track dates closely and request extensions in writing.

7. Consult a public adjuster or attorney if needed
If the gap between damage and payout is large, outside experts can help build a stronger claim file.

Avoiding wildfire-claims pitfalls

How to avoid the most common insurance hurdles

Be proactive early:
Start your claim immediately and upload photos before debris removal.

Insist on a single point of contact:
Multiple adjusters create inconsistency — request one assigned adjuster.

Don’t take the first estimate at face value:
Initial numbers are often low. Provide independent contractor estimates to push for accuracy.

Track ALE spending carefully:
Overages typically aren’t reimbursed; keep receipts and stay within your policy limits.

Ask for policy documents in full:
Many homeowners still don’t receive the complete policy with endorsements unless they request it.

Push back tactfully but firmly:
California law protects consumers. If something feels off, ask for clarification in writing.