SACRAMENTO, Calif. – California’s top insurance regulator on Thursday launched an investigation into State Farm over the company’s handling of claims from the January Los Angeles-area wildfires.

The investigation comes after survivors of the Palisades and Eaton fires said that the state’s largest home insurer was delaying and mishandling claims regarding damage to their homes and possible contamination from smoke.

The blazes destroyed thousands of buildings around Los Angeles, killed 30 people and displaced thousands of others. They were estimated to be among the costliest natural disasters in U.S. history.

California Insurance Commissioner Ricardo Lara said the investigation will review whether the company complied with state consumer protection and claim-handling laws.

“Californians deserve fair and comprehensive treatment from their insurance companies,” the Democrat said in a statement. “No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up.”

Survivors of the Eaton fire in Altadena have raised concerns about possible lead, asbestos and heavy metal contamination in their homes because of smoke.

State Sen. Sasha Renée Pérez, a Democrat representing Pasadena, in April called on Lara to launch a probe into the alleged mishandling of claims.

“The survivors of the Los Angeles County fires are experiencing financial and emotional hardships due to State Farm’s delays and denials of their valid insurance claims,” she and other lawmakers said at the time. “Despite years of faithfully paying premiums, they have been met with excessive documentation demands, denial of claims despite clear evidence, a convoluted and arduous claims process, and silence when seeking help after the disaster.”

State Farm has about 1 million home insurance customers in California.

Insurers including State Farm had difficulty doing business in California even before the wildfires. In 2023, State Farm and others stopped issuing residential policies because of the wildfire risk.

Last year, Lara unveiled regulations aimed at giving insurers more latitude to raise premiums in exchange for more policies in high-risk areas. State Farm said at the time the company was struggling.

The wildfires, which destroyed more than 16,000 buildings, made matters even worse.

In May, state regulators allowed State Farm to raise premiums 17% statewide for its California home insurance customers to help the company rebuild its capital after the costly wildfires.

State Farm initially sought a 22% rate increase for homeowners but revised it down a recent hearing before an administrative judge. The new rates in effect this month include a 38% hike for rental owners and 15% for tenants.

People who lost homes in the fires sued in April, alleging State Farm and other insurers colluded to “suddenly and simultaneously” drop coverage or halt writing new policies in fire-prone areas, including areas that burned. That left the homeowners underinsured and struggling to rebuild, the lawsuit alleges.

The American Property Casualty Insurance Association, the largest national trade association representing home, auto and business insurers, called the lawsuits meritless, saying it monitors to ensure its members comply with the state’s antitrust laws.

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Associated Press writer Mead Gruver reported from Cheyenne, Wyoming.

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Austin is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on X: @sophieadanna