L.A. County Opens Probe Into State Farm Over Wildfire Insurance Payouts

Los Angeles County has opened a formal investigation into State Farm’s handling of insurance claims filed after the Eaton and Palisades fires, amid mounting complaints from residents who lost their homes.

The County Counsel’s Office will examine whether the insurer engaged in systemic delays, underpayments, or improper denials of wildfire claims and whether any of that conduct violates California’s Unfair Competition Law.

Supervisor Kathryn Barger said Altadena residents, many of whom saw their properties destroyed in the Eaton Fire, have already suffered enough without having to “battle their own insurance company” to rebuild. She accused State Farm’s slow and inadequate claim handling of standing in the way of recovery for fire survivors and stressed that prompt, fair payouts are “a right, not a privilege.”

Supervisor Lindsey Horvath echoed those concerns, noting that county residents have paid State Farm millions of dollars in premiums over the years and expect the company to fully honor its policies. Families who lost everything, she said, deserve straightforward and timely treatment — not shifting estimates or unexplained denials — and called on State Farm to live up to its “good neighbor” branding.

One of those families is Jesse Albert’s. His Altadena home burned to the ground in the Eaton Fire. He says State Farm’s offer is less than half of what contractors estimate it will cost to rebuild — more than $3 million — leaving his family with a vacant lot and an enormous shortfall.

Albert says he had sought assurance from his State Farm agent last year that his coverage would be sufficient to reconstruct his home if disaster struck. He was told his policy limits were “more than enough.” After the fire, he says, the company told him he had hit those same caps and would not receive enough to replace the house.

Albert and several other fire victims have now sued State Farm, accusing the insurer of deliberately understating reconstruction costs and steering customers into lower coverage limits that could not realistically fund a rebuild.

In a written statement, State Farm said it is unclear what the county hopes to achieve with the investigation but argued that the probe will distract from its work helping policyholders recover. The company says it is processing more than 13,500 wildfire claims in California and has paid nearly $5 billion related to the January fires, with about 200 claims professionals still deployed in the state and backed by teams nationwide. State Farm maintains it is paying customers what they are owed and is working with elected officials to stabilize California’s troubled insurance market.

Albert, meanwhile, questions why it took nearly ten months after the fires for the county to launch an investigation at all.

“We’ve been shouting that there’s a serious problem,” he said, “and only now is anyone officially looking into it.”