Consumer group launches State Farm complaint form for LA wildfire claims

Pat Maio, Los Angeles Daily NewsDaily News

Consumer Watchdog unveiled a website this week where homeowners affected by last year’s Los Angeles County wildfires can file claims complaints against State Farm, the biggest home insurer in California.

The complaint form will be used to collect evidence for enforcement agencies to “help identify claims-handling violations or patterns of misconduct,” according to a statement from the Santa Monica-based advocacy group. The complaints will be shared with State Farm to help speed up resolution.

Rex Frazier, president at the Personal Insurance Federation of California, described the complaint form included in the settlement of State Farm’s emergency rate case this summer as something “novel.”

“I don’t recall anything like this. State Farm agreed to it, but it’s a general power that that Consumer Watchdog has,” said Fraser, whose Sacramento-based trade group represents major property and casualty insurance companies in California. “Maybe they’ll attempt to get this into future matters they’re involved with, but the Department of Insurance is not going to delegate their power on such matters to some outside group. I’ve never seen such a coordinated plaintiff lawyer focus against insurers following a big fire.”

The complaint process agreed upon by Consumer Watchdog and State Farm — with oversight by DOI in the settlement talks — focused on claims complaints that arose after the Pacific Palisades and Altadena wildfires that destroyed thousands of dwellings.

“We recognize the significant loss and disruption caused by the January 2025 Los Angeles wildfires and understand how important it is for policyholders to receive clear answers about their claims,” State Farm spokesman Sevag Sarkissian said Tuesday. “Under the settlement agreement, Consumer Watchdog may forward certain unresolved policyholder complaints to State Farm General Insurance Co. for review through our existing claims and reconsideration processes.”

State Farm is made up of several mutual companies in the U.S. In California, the State Farm General division, which is the largest insurer in the state, insures more than 1.2 million policyholders for homeowners’ insurance.

Sarkissian said that each complaint filed with Consumer Watchdog is evaluated individually based on the facts and policy terms.

“When damage is covered, we pay what is owed; when coverage does not apply, we explain the decision and available options,” he said. “This process provides policyholders with another way to raise concerns. It does not replace the California Department of Insurance’s oversight or affect policyholders’ legal rights.”

The form for consumers was hatched as part of a recent settlement among Consumer Watchdog, State Farm and California’s Department of Insurance. That settlement also secured $530 million in consumer savings, according to CW, when considering the premium increases State Farm originally sought for certain property owners who will now see their rates go down, while renters pay slightly more.

As part of the deal cut among the groups, State Farm agreed not to pursue a 30% hike it originally sought in mid-2024 to cover a landslide of claims following deadly wildfires that devastated several communities throughout California — including the Bridge fire in the Angeles National Forest in September 2024 that burned more than 56,000 acres across L.A. and San Bernardino counties. The January 2025 wildfires that killed 31 people and burned over 37,700 acres underscored State Farm’s need for the emergency rate hike.

In March, Insurance Commissioner Ricardo Lara let stand State Farm’s interim 17% emergency rate hike for homeowners — which was later finalized in a July 23 order that reduced rates, required refunds with 10% interest for condominium unit owners and rental policyholders, and provided a process for Consumer Watchdog to forward unresolved policyholder complaints to State Farm for review.

“The simple answer is that this is a ‘first’ in the sense that it is very specifically targeted at State Farm’s handling of claims arising from the Los Angeles wildfires,” said Will Pletcher, litigation director for Consumer Watchdog, in a statement provided to the Southern California News Group.

“The more nuanced answer is that Consumer Watchdog and other organizations have been gathering complaints and information from wildfire survivors throughout the recovery,” he said. “Consumer Watchdog regularly receives consumer complaints, and within a week of the fires … we issued a broader alert asking people to report insurance problems, price gouging and other post-disaster misconduct to law enforcement, regulators and Consumer Watchdog.”

Frazier pointed out that the large rate increases seen with State Farm and the FAIR Plan were not seen over a decade ago. Double-digit rate increases didn’t happen during the tenure of former Insurance Commissioner Dave Jones from January 2011 to January 2019, the predecessor of Lara, according to Frazier.

In May, California’s home insurance of last resort — formally known as the Fair Access Insurance Requirements Plan, or FAIR Plan — was given CDI approval to raise rates 29.1% for certain homeowners starting Oct. 15. The FAIR Plan first sought a 35.8% hike to keep it from slipping into financial trouble.

“We’ve had these utility fires, we had inflation, tariffs, the whole thing. Just providing insurance coverage, particularly property insurance, where you have to pay for labor and materials related to rebuilding a house, it’s just a lot more expensive to rebuild things now,” said Frazier. “We’ve been in this catch-up period for probably the last three to four years with companies needing giant increases that have no basis in history. I’ve never seen routine 20% and 30% rate increase requests in all the years I’ve been doing this. That’s how out of whack the market was. This is why State Farm has received the lion’s share of attention.”