LA County sues State Farm, alleging mishandling of wildfire survivor claims

LOS ANGELES (KESQ) - Following similar action by the state, Los Angeles County filed a lawsuit today against State Farm insurance company, alleging widespread mishandling of claims by policyholders in the Eaton and Palisades fire burn zones.

"Wildfire survivors have spent far too long fighting to receive the benefits they paid for and counted on,'' county Supervisor Kathryn Barger said at a downtown news conference announcing the legal action. "... Survivors have reported deep delays in processing claims and payments, repeated changes in adjustments, sometimes up to 10 to 15, underpayments and partial payments, inconsistent handling of additional living expenses and serious problems with smoke damage claims.  

"This is unacceptable,'' she said.   

The Los Angeles Superior Court lawsuit specifically alleges that State Farm violated California's unfair competition and false advertising laws in the handling of Eaton and Palisades fire survivors, according to County Counsel Dawyn Harrison.

"The lawsuit alleges that State Farm engaged in unfair, unlawful and deceptive business practices that harm their policyholders,'' Harrison said. "The lawsuit seeks injunctive relief to stop State Farm from these unfair and unlawful practices and fulfill their promises to their policyholders. The lawsuit also seeks restitution for policyholders, civil penalties and abatement for alleged ongoing health hazards associated with inadequate testing and remediation."  

State Farm issued a statement saying the company "strongly disagrees'' with the county's characterization of its wildfire response.   

"We will review the lawsuit and respond through the appropriate legal process,'' according to the company. "Wildfire survivors deserve support, clear answers, and a fair claims process. Insurance practices in California are regulated by the California Department of Insurance, and State Farm cooperated fully with the Department's review of our wildfire claims response.

"Our focus remains on helping customers recover. State Farm has paid more than $6.2 billion on claims related to the 2025 Los Angeles wildfires, including approximately $1 billion for smoke-related damage, and has closed about 78% of claims. 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 state Department of Insurance filed a lawsuit against State Farm in May making similar allegations to the county suit. The state lawsuit could potentially lead to State Farm temporarily losing its license to operate in California.

The state's lawsuit seeks millions of dollars in penalties against State Farm. The county lawsuit, meanwhile, more specifically seeks financial restitution for fire victims.

County Supervisor Lindsey Horvath said fire survivors "should not have to fight the insurance company to rebuild their lives."  

"These families did their part,'' she said. "They paid their premiums month and month, year after year. They trusted that if the worst happened, the protection they paid for would be there. And then the worst happened. Instead of certainty, too many survivors have been left waiting for an answer, for an adjuster, for a fair payment, for the resources they need to rebuild."  

According to State Farm's website, the company has handled 13,700 claims from the Los Angeles wildfires, and made more than $6 billion in payments. The company expects total payments to ultimately reach $7 billion.