County files lawsuit against State Farm

Los Angeles County announced Monday that it has filed a lawsuit against State Farm General, alleging the insurer mishandled claims from survivors of last year's Palisades and Eaton fires. The lawsuit, filed in Los Angeles County Superior Court, claims State Farm violated California's unfair competition and false advertising laws in its handling of fire-damage claims, according to CBS News and the Los Angeles Times.

County officials said their investigation, which reviewed more than 500 complaints and documents provided by State Farm policyholders, found unreasonable delays in processing claims and what they described as "systematic underpayments." Officials also said State Farm had "illegally suppressed smoke damage claims," according to the Los Angeles Times.

The lawsuit alleges that State Farm engaged in illegal and deceptive business practices that kept victims from receiving what they were entitled to under their policies, and that the company "drastically lowballed" estimates of financial losses for destroyed or damaged homes, as reported by the Los Angeles Times. County officials said State Farm "failed to substantially comply" with requests for documents and information, and the lawsuit includes dozens of complaints from county fire victims.

Survivors describe ongoing hardship

At a Monday news conference, Eaton Fire survivor Joy Chen, executive director of Every Fire Survivor's Network, said that 19 months after the fire, families are still suffering. "Two-thirds of us are still displaced. By this time, retirement savings are drained, credit cards are maxed. More than half of us are running out of housing funds within the next six months," Chen said, according to CBS News. She called insurance "a barrier to recovery" rather than the safety net it was expected to be.

A. County Supervisor Kathryn Barger, who represents Altadena, said wildfire recovery has been particularly difficult for people with standing homes damaged by fire. "Many of them have lamented that they wish their homes had burned," she said, as reported by CBS News. Barger said the county's legal investigation was prompted by more than 500 complaints and documents from State Farm policyholders, and that "State Farm has unjustly ignored this group of survivors, leaving them overwhelmed and frustrated."

Survivors have reported delays in processing claims and payments, changes in insurance adjusters, underpayments, partial payments, and serious problems with smoke damage claims, according to CBS News. These delays, they say, have forced families to continue paying for temporary housing.

State Farm responds

State Farm spokesman Bob Devereux said in a statement that the company would respond to the lawsuit through the legal process and that "State Farm General strongly disagrees with Los Angeles County's characterization of our wildfire claims response," as reported by the Los Angeles Times.

Devereux said State Farm has paid more than $6.2 billion on claims related to the two wildfires, including about $1 billion for smoke-related damage. He said about 78% of the claims have been closed, and that the company continues "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." Earlier this year, State Farm rejected suggestions that it engaged in "a general practice of mishandling or intentionally underpaying" claims, calling the market "dysfunctional" at the time, according to CBS News.

Regulatory context

The state of California is already pursuing legal action against State Farm, seeking millions in penalties after an investigation by the California Department of Insurance found the company was slow to investigate and underpaid claims from the 2025 Los Angeles-area wildfires, regulators said in May, as reported by CBS News. The department has reported that 11,300 State Farm policyholders filed homeowner claims arising from last year's county fires, according to the Los Angeles Times.

State Farm is California's largest private insurer, with more than 2.8 million policies, according to the Los Angeles Times. The county's lawsuit seeks restitution and civil penalties.