State Farm General Insurance Company, the largest insurer in California, mishandled thousands of claims related to the 2025 Palisades and Eaton fires as it “delayed, underpaid and buried” thousands of claims, the California Insurance Commissioner’s office said Monday.
The department said its investigation discovered there was a pattern of delay and denial of claims from State Farm. Among 220 claims investigators examined, there were nearly 400 state law violations in 114 of those claims, according to the state agency.
The violations appear to reflect what the wildfire survivors have been protesting all along: They have been complaining for more than a year that insurers, including State Farm, underpaid their claims while causing confusion and conducting slow and incomplete investigations. Other violations include smoke damage claim denials and delays, and inadequate communication, according to the department.
“Wildfire survivors came to us for help, and we followed the facts,” Insurance Commissioner Ricardo Lara said in a statement. “Our investigation found that State Farm delayed, underpaid and buried policyholders in red tape at the worst moment of their lives. That is unacceptable, and we are taking decisive action to hold them accountable.”
The state agency said it’s seeking millions of dollars in penalties. Under California law, penalties may reach $5,000 per violation, or $10,000 for willful violations, Lara’s office said. It also calls for a suspension of the company’s license for up to a year.
Among over 38,000 claims filed related to the 2025 January wildfires, nearly one third of them were filed by State Farm policyholders, the state agency said.
“The Los Angeles fires were one of the most destructive disasters in our state’s history,” Lara said. “Survivors deserve a fair, timely recovery, not obstacles and delays. We are taking a two-pronged approach: legal action to
address State Farm’s conduct, and legislative action to ensure this does not happen again.”
The Bevel app uses artificial intelligence to help families build a comprehensive inventory of what was lost. Carolyn Johnson reports for the NBC4 News at 5 p.m. on Monday, Nov. 3, 2025.