State Farm stalled, rejected claims and stretched the process out for wildfire survivors far longer than they say the law allows. Now, those victims are headed for court.
Los Angeles County filed a lawsuit this week against the Illinois-based insurance giant, accusing State Farm of violating California laws and regulations in the way it handled claims tied to the Palisades and Eaton fires on Jan. 7.
The county alleges the company delayed payments on fire claims, offered homeowners settlements far below what they were owed and left policyholders in financial distress. The lawsuit also claims State Farm repeatedly reassigned insurance adjusters, forcing customers to restart or re-explain their cases, downplayed or suppressed smoke-damage claims and misled the public with advertising suggesting it would be there to help.
For residents of Pacific Palisades, Malibu, Altadena and Pasadena, the accusations will sound painfully familiar.
In 2025, as State Farm reported nearly $13 billion in profit — more than double the previous year’s total — the county says the company was squeezing desperate California families over the coverage they needed most.
Rather than paying 100% of losses for personal property off the bat, State Farm only offered 50%, unless customers compiled “the list” — the dreaded itemization of every lost possession, an experience that many fire victims likened to losing their homes all over again.
Only media coverage, and legislative pressure, moved the company to raise its default payout to 65%.
California Insurance Commissioner Ricardo Lara showed little interest in cracking down on State Farm, at first.
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It took a protest movement — organized by the Every Fire Survivor’s Network — to push him to take action, and investigate the company.
Lara’s investigation ultimately found a shocking pattern of violations by the company, and threatened its license to operate in California.
Ironically, wildfire survivors who still had State Farm policies were the lucky ones: The company canceled coverage for many residents in the months, and even days, leading up to the fire.
The drama continues. Earlier this week, legislators in Sacramento reached a deal on SB 492, a bill to protect wildfire victims from caps on damages. Gavin Newsom wanted to protect the big utilities, but backed down in the end.
However, on Monday, the Legislature failed to vote on SB 492. That means Gov. Newsom could call a special legislative session to deal with the issue.
Rather than bailing out utility companies, or protecting insurance companies, our leaders need to put wildfire victims first.
LA County did that this week. State Farm will be held accountable — and it’s about time.