Los Angeles County files lawsuit against State Farm for allegedly mishandling wildfire survivor claims

Los Angeles County leaders said it's time to take a "historic" stand for the 2025 wildfire survivors and announced the filing of a lawsuit against State Farm on Monday, alleging the agency mishandled survivors' claims.

The county's suit claims State Farm violated California's unfair competition and false advertising laws in its handling and processing of fire-damage claims from survivors of both the Eaton and the Palisades fires.  

This comes as the state is already pursuing legal action against State Farm, seeking millions of dollars in penalties after an investigation found the insurance company was slow to investigate and underpaid claims from the 2025 Los Angeles-area wildfires, regulators said in May. 

Eaton Fire survivor Joy Chen said that 19 months after the fire, families are still suffering. "Two-thirds of us are still displaced. By this time, retirement savings are drained, credit cards are maxed. More than half of us are running out of housing funds within the next six months," Chen said, calling insurance a barrier to recovery rather than the safety net that it was expected to be.

L.A. County Supervisor Kathryn Barger said wildfire recovery has been particularly difficult for people with standing homes damaged by fire. "Many of them have lamented that they wish their homes had burned," she said. 

Survivors allege that they have experienced delays in processing claims and payments, changes in insurance adjusters, underpayments, partial payments, and serious problems with smoke damage claims. The delays, they say, lead families to continue paying for temporary housing.

"State Farm has unjustly ignored this group of survivors, leaving them overwhelmed and frustrated," Barger said, noting the county's legal investigation into more than 500 complaints and documents provided by State Farm policyholders.

Earlier this year, State Farm said in a statement that it rejected any suggestion that it "engaged in a general practice of mishandling or intentionally underpaying wildfire claims" and called the state's insurance market "dysfunctional." The company said it has paid out more than $6 billion in claims related to the fires and expects that amount to eventually top $7 billion.

"State Farm took the premiums. Now they must honor the policies. No more runaround. No more unnecessary delays. No more making survivors fight for what they are owed," Supervisor Lyndsey Horvath said.