Los Angeles County filed a lawsuit on Monday, accusing State Farm of systematically mishandling claims residents made after California faced some of the largest fires in history nearly two years ago.
The county filed the 100-page complaint against the state’s largest insurance provider in Los Angeles County Superior Court. The lawsuit alleged that State Farm engaged in unfair, unlawful, and deceptive business practices that harmed policyholders. It seeks restitution for people whose homes were damaged or destroyed in the January 2025 Eaton and Pacific Palisades fires, including civil fines and abatement for alleged ongoing health hazards associated with “inadequate testing and remediation,” according to county counsel Dawyn Harrison. The development comes as State Farm has paid out over $6 billion for thousands of claims filed after one of the most devastating fires in California history.
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“State Farm promised prompt, reliable claims service and industry-leading catastrophe response,” the complaint said. “But for many State Farm policyholders affected by the LA Wildfires, State Farm’s failure to pay benefits due under their policies has instead prolonged the catastrophe.”
The lawsuit alleges the company violated California’s competition and false advertising laws in its handling of claims, with hundreds of State Farm policyholders allegedly struggling to get processed or paid for rebuilding or living expenses. Some residents have had legitimate claims denied, while others have faced delays in having an adjuster visit their property, according to county officials.
State Farm has said the fires that ripped across Los Angeles rank among “the costliest disasters in the history of State Farm.”
On Monday, the insurer pushed back against the latest lawsuit, saying it “strongly disagrees” with Los Angeles County’s characterization of its wildfire claims response. The insurer said it has paid more than $6.2 billion on claims related to the 2025 Los Angeles wildfires and has closed about 78% of claims. State Farm has “cooperated fully” with the California Department of Insurance’s review of the insurer’s wildfire claims response, the company said. Around 11,300 State Farm policyholders filed homeowner claims arising from last year’s devastating fires, according to the Department of Insurance.
“We will review the lawsuit and respond through the appropriate legal process. Wildfire survivors deserve support, clear answers, and a fair claims process,” State Farm said. “We continue working directly with customers whose claims remain open and evaluating each claim based on the facts of the loss and the coverage provided by the customer’s policy.”
The fires in California have sparked a broader debate about the state’s policy of price controls on the insurance industry, which critics believe is responsible for the mass exodus of insurers from the state, triggering a loss of competition and lower-quality coverage.
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“Insurance premiums simply mirror the level of risk, and if the level of risk goes down over time, you’re going to see the premiums go down,” a Los Angeles resident, Dr. Houman Hemmati, previously told the Washington Examiner.
“The state has failed at fire prevention and fire management, which has then resulted in large-scale catastrophes that could have been prevented or managed as a smaller-scale catastrophe,” he added. “I think the state will at some point recognize that they need to do more to actually prevent catastrophic wildfires and be prepared for other disastrous events like l earthquakes and floods so that the insurance premiums don’t have to be so high.”
