State Farm General Insurance confirmed it is cooperating with a market conduct examination initiated by the California Department of Insurance (CDI), which is investigating what regulators described as concerning patterns in how the company handled catastrophic wildfire claims.
According to State Farm, a detailed review will show that thousands of policyholders affected by the Los Angeles fires in January were satisfied with the company’s response.
As of June 17, the insurer processed more than 12,855 related claims and paid out over $3.96 bn.
California Insurance Commissioner Ricardo Lara stated that the examination will focus on recurring issues such as frequent reassignment of adjusters with limited continuity, inconsistent handling of similar claims, and weak record-keeping or information-sharing within claims teams.
He said these practices add stress for affected residents, delay recovery, and reduce confidence in insurers.
Lara emphasized that testimony and complaints from policyholders will form the basis of the investigation. He encouraged individuals facing delayed payments, claim handling disputes, smoke damage disputes, or other fire-related concerns to file complaints directly with the CDI.
State Farm advised policyholders to continue contacting the company directly with questions or problems, stating that it reviews each case individually to assess losses, confirm damages, and apply available coverage.
The insurer, California’s largest provider of homeowners and personal auto coverage, said it deployed its full catastrophe response capacity after the Eaton and Palisades wildfires, calling it the largest fire event in its history.
Consumer advocacy group Consumer Watchdog has called on Commissioner Lara to finish the investigation before considering State Farm’s request for rate increases.
Executive Director Carmen Balber said policyholders initiated the CDI probe by presenting claims of low settlement offers, delayed processing, and denial of coverage.
Balber added that market conduct exams can extend over several years, but in this case, she argued the process should move faster due to the volume and seriousness of complaints.
