Los Angeles County investigating Farmers Insurance's handling of Eaton and Palisades fire survivors' claims

Counsel for Los Angeles County has opened an investigation into Farmers Insurance Company for their handling of claims submitted by customers who were affected by last year's devastating Eaton and Palisades fires.

In a news release, the county's office of the county counsel said the investigation will focus on California's Unfair Competition Law after affected customers complained about "delays, refusals to pay for testing and remediation of lead and other contamination, underpayments, and denials of legitimate wildfire claims."

"Eaton Fire survivors did everything right—responsibly paying their premiums year after year—but when disaster hit, Farmers left them with a contaminated home and refused to pay for testing and cleanup," said Los Angeles County Supervisor Kathryn Barger. "That's an unfair business practice that needs to end now. My constituents shouldn't have to walk back into homes with lead and asbestos because an insurance company won't pay for the test that would prove it's there. We are going to hold Farmers accountable to the law, and if they've broken it, they will answer for it."

CBS LA has reached out to Farmers for a statement but did not immediately hear back.

According to county counsel, Eaton Fire survivors who are policyholders with Farmers said in a recent meeting that the insurance giant has been "slow, resistant, or outright refused to pay for testing for contamination by qualified industrial hygienists, forcing residents to pay for testing out of pocket." That behavior comes after testing revealed that many homes still standing are contaminated with lead, asbestos, chromium and other toxic substances, county counsel said.

As the survivors look to clear the contaminated substances, Farmers has declined to cover related living expenses, the policyholders allege. 

"After paying millions of dollars in premiums, policyholders deserve the benefits and support they paid for," said Supervisor Lindsey P. Horvath. "Families whose homes survived the Palisades and Eaton Fires but remain damaged or contaminated should not be forced to choose between returning to an unsafe home and financial devastation. Farmers has had more than enough time to do right by their customers. They cannot evade the law or their responsibility to the people who paid for their coverage. Our residents deserve justice and Los Angeles County is taking action."  

The investigation into Farmers comes after LA County filed a lawsuit against State Farm last month, alleging the agency mishandled survivors' claims in a similar manner.

Policyholders claimed their claims had delayed responses and were ultimately underpaid. State Farm said it strongly disagreed with the county's characterization of the events.