Los Angeles County announced Thursday it is opening an investigation into how State Farm General has treated January wildfire victims after complaints that their claims have been delayed, denied and underpaid.<\/p>\n
The state\u2019s largest home insurer was notified of the probe<\/a> in a letter that included demands for a wide range of data and documents to determine whether the company has violated the state\u2019s Unfair Competition Law. <\/p>\n Violations can result in injunctive relief, restitution and civil penalties of up to $2,500 per day per violation. <\/p>\n Assistant County Counsel Scott Kuhn said the probe\u2019s goal is not necessarily to go to court, but to alter the company\u2019s practices and ensure policyholders receive the payouts they are due.<\/p>\n \u201cWe want State Farm to take care of its customers as soon as possible, because time is of the essence. We want residents to be able to get back in their homes and start the rebuilding process,\u201d said Kuhn, who is leading the investigation. \u201cWe certainly would like to avoid litigation and just have State Farm do right by its customers.\u201d<\/p>\n Bob Devereux, a State Farm spokesperson, said in a written statement that \u201cthe 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. State Farm is committed to paying customers what they\u2019re owed.\u201d <\/p>\n The January fires that damaged or destroyed nearly 13,000 homes and killed 19 people resulted in estimated losses of $7.6 billion for the insurer. State Farm said Thursday that it has received more than 13,500 claims and paid nearly $5 billion to victims.<\/p>\n The county\u2019s probe puts more pressure on the insurer following an announcement by the Department of Insurance in June that it was opening a \u201cmarket conduct exam\u201d<\/a> of State Farm following the same types of complaints. <\/p>\n Such an exam is an administrative action that department officials have noted can result in changes in practices, penalties and hundreds of millions of dollars being passed on to policyholders. The department said it would expedite the investigation and it could be completed in months.<\/p>\n \u201cThese allegations mirror issues the Department is investigating in response to complaints about State Farm received directly from wildfire survivors,\u201d Insurance Commissioner Ricardo Lara said in a statement Thursday. \u201cWe will release our findings publicly as soon as they are ready. A market conduct examination is an extensive fact-based review dictated by law.\u201d<\/p>\n Attorney Harvey Rosenfield, founder of Los Angeles advocacy group Consumer Watchdog<\/a>, said the county\u2019s action is a step up from a market conduct exam because it is a civil action that can result in a court order changing insurer practices, refunds to consumers and larger penalties. Additionally, if criminal fraud is discovered, that can can be prosecuted.<\/p>\n \u201cState Farm is now in dangerous territory. Every denial of a survivor\u2019s claim, every delay of a survivor\u2019s claim can result in massive financial consequences for the company,\u201d said Rosenfield, also author of Proposition 103, the 1988 ballot measure that governs home insurance in the state.<\/p>\n With the first anniversary of the Palisades and Eaton fires approaching, wildfire victims have grown impatient with Lara, saying their complaints against State Farm have not been resolved. <\/p>\n