{"id":773472,"date":"2026-05-04T21:57:13","date_gmt":"2026-05-04T21:57:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/773472\/"},"modified":"2026-05-04T21:57:13","modified_gmt":"2026-05-04T21:57:13","slug":"california-state-farm-violated-law-in-handling-of-l-a-fire-insurance-claims","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/773472\/","title":{"rendered":"California: State Farm violated law in handling of L.A. fire insurance claims"},"content":{"rendered":"

By Levi Sumagaysay<\/a>, CalMatters<\/p>\n

This story was originally published by\u00a0CalMatters<\/a>.\u00a0Sign up<\/a>\u00a0for their newsletters.<\/p>\n

State Farm could face millions of dollars in penalties and a possible temporary suspension of its license in California as a result of hundreds of alleged law violations related to its handling of claims from the Los Angeles County fires last year.\u00a0<\/p>\n

California\u2019s largest individual property insurance provider \u201cshowed a troubling pattern of claims handling practices\u201d after the fires, the state\u2019s Insurance Department said Monday. The department is seeking a hearing into the matter, which comes after an\u00a0investigation<\/a>\u00a0it opened into State Farm\u2019s conduct last June.<\/p>\n

\u201cOur investigation found that State Farm delayed, underpaid, and buried policyholders in red tape at the worst moment of their lives,\u201d said Ricardo Lara, the state\u2019s insurance commissioner, in a statement.<\/p>\n

State Farm spokesperson Sevag Sarkissian said in email that the insurance department has \u201cdistorted\u201d the picture of the company\u2019s response to the fires.\u00a0 In an extended statement on its website, the company had some harsh words for the department over regulatory delays in the overall insurance market. The company said the department\u2019s \u201cthreat to suspend State Farm General\u2019s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California\u2019s homeowners insurance market.\u201d<\/p>\n

If an administrative law judge finds that the state\u2019s 430 claims have merit, each violation is subject to up to a $5,000 penalty. Willful violations of the law are subject to penalties of up to $10,000 each. That means the company could owe about $2 million to $4.3 million. Insurers have paid billions of dollars in claims from the deadly L.A.-area fires, with State Farm saying it has paid more than $5.7 billion so far.<\/p>\n

The insurance department opened an investigation into State Farm, which insures about a fifth of California property owners, last year after complaints from fire survivors about the company delaying and denying claims.\u00a0<\/p>\n

\u201cCommissioner Lara calls a $2 million fine historic,\u201d said Joy Chen, executive Director of Every Fire Survivor\u2019s Network, a group that has\u00a0called for Lara to resign<\/a>, in a statement. \u201cState Farm\u2019s parent (company) sits on $240 billion in assets. They have the money to fulfill their obligations to L.A. fire survivors.\u201d<\/p>\n

The insurance department\u2019s investigation, involving 220 claims related to the fires, found violations in 52% of them, according to the accusation filed by the department Monday. They included slow and inadequate claims investigations, underpayment, multiple claims adjusters assigned and delayed communication with policyholders. In some cases, the department asked State Farm to reopen claims and correct its violations, according to the accusation.<\/p>\n

After a hearing, which has yet to be scheduled, any ruling by the administrative law judge will be reviewed by the commissioner. The commissioner will impose penalties and decide on whether to suspend for one year the company\u2019s certificate of authority, which is what gives it the right to sell insurance in the state.\u00a0<\/p>\n

It\u2019s unclear what would happen to State Farm\u2019s customers if the company were to be suspended for a year, said Michael Soller, spokesperson for the insurance department, which has been trying to ensure that insurance companies continue to offer insurance coverage in California.<\/p>\n

\u201cBetween the scope of the fires and the scope of this company, we\u2019re in pretty unprecedented territory,\u201d Soller said.<\/p>\n


\n <\/p>\n

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