State Farm says it has paid about $5 bn to policyholders affected by California wildfires earlier this year, even as it faces parallel investigations by Los Angeles County and the California Department of Insurance over how those claims were handled.
Los Angeles County Counsel has opened a civil investigation into State Farm General Insurance Co., focusing on claims tied to the January Easton and Palisades fires.
The inquiry seeks extensive documentation on claims operations, including the role of human adjusters and any use of artificial intelligence in reviewing losses.
County officials say the probe follows mounting complaints from residents about delayed payments, underpaid claims, and denials tied to wildfire damage.
The investigation centers on potential violations of California’s Unfair Competition Law, according to the Office of the County Counsel.
Kathryn Barger, chair of the Los Angeles County Board of Supervisors, said survivors have been clear about the impact of delays. She said insurance payments determine whether families can rebuild, stressing that timely and fair claim handling is a right, not a benefit.
In a formal letter to State Farm and its general counsel, the county demanded broad categories of records.
The request covers documents, reports, databases, dashboards, and summaries that track or aggregate wildfire-related claims. The scope extends beyond individual files into system-level oversight.
The county also wants training materials and internal communications tied to fire and smoke damage claims, including guidance provided to employees and contractors. It is seeking disclosure of any changes to those practices since the fires began on Jan. 7.
Questions around artificial intelligence sit squarely in the request, with officials asking how automated tools may have influenced claim reviews.
In addition, Los Angeles County requested all materials connected to a market conduct examination launched by the California Department of Insurance in June. Regulators at the time cited troubling patterns in catastrophic wildfire claims.
State Farm addressed payouts in an online update, saying recovery after a catastrophe rarely follows a straight path.
The insurer said families move through rebuilding and recovery at different speeds, and that many continue to work through portions of the claims process based on their individual circumstances.
Beyond claim payments, State Farm said it donated $2 mn this year to California nonprofit groups supporting disaster relief and recovery. The company did not respond to requests for further comment.
State Farm General is also among roughly 40 insurers that filed special requests to recoup part of their share of the FAIR Plan’s $1 bn assessment following the Los Angeles wildfires.
Beginning Dec. 1, the carrier started charging policyholders temporary surcharges tied to those costs.
Homeowners and renters now pay 1.13% of premium for two renewal periods. Other personal lines policyholders face a 2.25% charge for one renewal, while commercial property policyholders pay 0.26% for a single renewal. The temporary fee applies to commercial policies starting at the beginning of the year.
