California seeks up to $4 million from State Farm over alleged mishandling of wildfire claims
The state
The regulators, who launched their investigation into
The investigation’s findings point to slow and inadequate investigations, underpayments of claims, multiple adjusters causing confusion and smoke damage claims receiving denials and delays. Of the sample 220 claims, 114 claims held 398 state law violations for which penalties range
“Wildfire survivors came to us for help, and we followed the facts,” said Commissioner
“The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market,”
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In its announcement Monday, the DOI said that it forwarded its findings in the investigaton to an administrative law judge, who could decide whether to suspend the company’s certificate of authority to underwrite policies in
The major enforcement action follows numerous complaints from residents about delays lasting over a year, replacement payments that didn’t cover the costs of rebuilding a new home, and denials of legitimate wildfire claims from the
Other complaints from wildfire claimants have pointed to an “adjuster roulette,” a term that has come to describe the regular pattern of insurance agents assigning one adjuster after another without ever settling wildfire claims.
“The lack of enforcement of our regulations is not just a
See more: LA County launches investigation of
Some 41,800 claims in response to the wildfires have been filed across all insurers, according to the Department of Insurance’s official claims tracker.
Just two months ago, a settlement between the DOI and Consumer Watchdog approved the company’s 2025 emergency rate hike of 17% for homeowners.
Consumer Watchdog, an advocacy group, argued the insurance department had placed the cart before the horse by not holding a hearing when Lara approved the interim rate hike for the state’s largest insurer.
The legal action is coupled with Lara’s sponsorship of two pieces of legislation.
The Disaster Recovery Reform Act, filed by state Sen.
The Smoke Damage Recovery Act filed by Assemblymember
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House bill seeks to protect insured homeowners after disasters
California moves to penalize State Farm for delaying, underpaying wildfire claims
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