Los Angeles County Sues State Farm for Unfair Business Practices in Handling 2025 Wildfire Claims

The lawsuit alleges illegal delays, underpayments and denials, seeks restitution and civil penalties.

LOS ANGELES — Los Angeles County has sued State Farm, alleging unfair business practices in the company’s handling of insurance claims filed by policyholders affected by the January 2025 Eaton and Palisades Fires.

The lawsuit follows county counsel’s investigation of State Farm’s alleged violations of California’s Unfair Competition Law relating to delays, underpayments, and denials of wildfire claims from its policyholders impacted by the 2025 wildfires. The lawsuit alleges that State Farm subjected policyholders to:

False advertising inducing them to purchase and rely on State Farm insurance;

Unreasonable delays in investigation and processing of claims;

Systematic underpayments of claims even where the rightful amount of the claim was clear;

Frequent and improper reassignment of individual claim adjusters;

Systematic barriers to policyholders’ ability to contact and communicate with adjusters;

Refusal to provide due compensation for Additional Living Expenses (ALE);

Misrepresentations during the claims process to discourage pursuit of claims; and

Illegal suppression of smoke damage claims.

County counsel’s investigation of State Farm’s handling of policyholder claims included reviewing information from community-based organizations including Every Fire Survivors Network (EFSN), Department of Angels, and Eaton Fire Residents United, as well as reviewing hundreds of complaints and documents from State Farm policyholders. State Farm failed to substantially comply with county counsel’s requests for documents and information made during the investigation.

County counsel is empowered by statute to investigate, and to civilly prosecute violations of the Unfair Competition Law and False Advertising Law on behalf of the People of the State of California. The lawsuit seeks restitution to impacted State Farm policyholders, injunctive relief, and civil penalties of up to $2,500 per violation.

Details: Find the lawsuit here: State Farm Complaint