By Jonathan Stempel
Aug 31 (Reuters) - State Farm was sued on Monday by Los Angeles County, which accused the largest U.S. home insurer of mishandling claims by victims of the January 2025 wildfires in southern California.
According to the complaint, State Farm handled claims worse than any other insurer, including by failing to pay benefits, lowballing loss estimates, bouncing policyholders from one adjuster to another, and pressuring policyholders whose contaminated homes remained standing to return
home.
The complaint, filed in Los Angeles County Superior Court, seeks restitution for people whose homes were damaged or destroyed in the fires in Pacific Palisades, Altadena and nearby communities, as well as civil fines.
"State Farm promised prompt, reliable claims service and industry-leading catastrophe response," the complaint said. "But for many State Farm policyholders affected by the LA Wildfires, State Farm's failure to pay benefits due under their policies has instead prolonged the catastrophe."
The Bloomington, Illinois-based insurer has denied systematically mishandling or underpaying claims.
In a statement, State Farm said it "strongly disagrees with Los Angeles County’s characterization of our wildfire claims response. We will review the lawsuit and respond through the appropriate legal process. Wildfire survivors deserve support, clear answers and a fair claims process."
State Farm said it has paid in excess of $6.2 billion on claims for homes, vehicles and property damaged or destroyed in the wildfires, including about $1 billion for smoke-related damage.
In May, California Insurance Commissioner Ricardo Lara said he was seeking millions of dollars in penalties from State Farm, the largest amount following a wildfire this century, after an investigation found "widespread mishandling" of claims.
Sanctions could also include a one-year suspension of State Farm's license in the state, Lara said.
The wildfires killed at least 31 and destroyed or damaged more than 16,000 structures, charring an area larger than Paris. Much of the damage came from the Palisades Fire in the Pacific Palisades and the Eaton Fire in Altadena.
(Reporting by Jonathan Stempel in New York; editing by David Gaffen)
