The investigation comes in response to growing customer complaints
of ConsumerAffairs-
California's Department of Insurance has launched an investigation into State Farm's fire insurance claim practices.
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The probe follows mounting consumer complaints and suspicions of unfair denial tactics after recent wildfires.
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Regulators are assessing whether State Farm is violating Californias insurance laws or consumer protection statutes.
After escalating complaints from homeowners, the California Department of Insurance (CDI) has opened a formal investigation into State Farms handling of wildfire-related insurance claims. Specifically, the agency will address charges that the insurer has improperly delayed or denied valid claims from homeowners affected by catastrophic wildfires across the state.
The investigation was triggered by complaints by policyholders following destructive fire seasons in 2023 and 2024. The complaints allege that State Farm systematically underpaid claims, imposed excessive documentation burdens, and unjustly denied benefits, leaving many homeowners in financial and emotional distress after losing their properties.
Californians have endured unimaginable hardship from wildfires, said California Insurance Commissioner Ricardo Lara. My office will not tolerate any attempt by insurers to shirk their legal responsibilities during these moments of greatest need.
State Farm responds
In response, State Farm spokesperson Sevag Sarkissian emphasized the company's commitment to assisting its policyholders.
"A fair review will find that thousands of State Farm customers are being helped by our teams on the ground in Los Angeles County and are very satisfied, Sarkissian said in a statement to the San Francisco Chronicle. Our efforts will remain on serving all our customers and meeting our obligations under the contract while providing."
State Farm has reported that it has received over 12,855 claims related to the recent wildfires and has paid out more than $3.96 billion to its California customers as of June 10, 2025.
The CDIs investigative team is currently auditing a selection of claims processed by State Farm in fire-affected counties, including Butte, Shasta, and Ventura. Investigators are evaluating whether State Farm violated provisions of the California Insurance Code, particularly laws requiring prompt, fair, and equitable settlements.
State Farm isnt the only insurance company that has drawn complaints from California homeowners. Earlier this week, several Los Angeles-area homeowners who lost their houses in the devastating January 7 wildfires filed lawsuits against three major insurance providers, alleging they were left underinsured and financially stranded after the disaster.
The lawsuits, filed in Los Angeles County Superior Court, accuse USAA and two AAA-affiliated insurers of negligence and fraud, claiming the companies grossly underestimated replacement costs and failed to fulfill their coverage promises.
Posted: 2025-06-13 13:14:43
