By The Office of the County Counsel
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:
“Wildfire survivors have already endured unimaginable loss; they should not have to fight their insurance company simply to receive the benefits they paid for and counted on,” said Los Angeles County Supervisor Kathryn Barger. “These delays, underpayments, and denials have real consequences. They keep families from rebuilding, prolong displacement, and ultimately slow the recovery of entire communities. That is why Los Angeles County is taking action to stand up for survivors and hold State Farm accountable.”
“Los Angeles County residents have paid State Farm millions in premiums over many years, and the company has a clear obligation to honor its policies in full,” said Los Angeles County Supervisor Lindsey P. Horvath. “Families who lost everything in the Palisades and Eaton Fires deserve fair and timely treatment — not delays, denials, or underpayments. State Farm must live up to its commitment to be a ‘good neighbor’ and do right by its customers who have lost so much.”
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.
With more than 2.8 million residential and commercial policies statewide, State Farm is California’s largest private insurer.
The lawsuit notes that third-party surveys have found widespread frustration with State Farm’s treatment of claims, with far too many residents facing undue claims delays, underpayments and denials that have compounded their hardships and losses in the aftermath of the devastating Eaton and Palisades Fires.
In addition to financial impacts, State Farm’s delays, denials, and misrepresentations have had very real physical, psychological, medical, and familial consequences on displaced policyholders. For older policyholders and medically vulnerable residents, delays can be especially devastating. The complaint includes allegations concerning a 97-year-old policyholder who simply wishes to return home – he has been unable to do so and his family has faced numerous obstacles in obtaining adequate testing and securing the benefits he is owed to cover his living expenses while he is displaced.
A January 2026 report by the nonprofit Department of Angels indicates State Farm customers have much higher dissatisfaction rates than customers of other insurers, reporting much higher rates of claim denials, lowball claims estimates, poor communication, and multiple adjusters being assigned to their claims without a unique point of contact ever being established. A July 2026 report by Department of Angels indicates that State Farm customers continue to experience similar challenges. There is an urgent need to resolve claims as quickly as possible before displacement coverage runs out and so that survivors can return home.
County Counsel Dawyn R. Harrison said, “We are committed to holding State Farm accountable and making sure claimants are treated fairly, have their claims resolved as quickly as the law requires, and are compensated for harm suffered due to State Farm’s unfair practices.”
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.
County Counsel’s Affirmative Litigation and Consumer Protection Division will prosecute the lawsuit in Los Angeles Superior Court. County Counsel is also working with Consumer Watchdog and veteran consumer protection attorney Christina Tusan on this litigation.
On May 4, 2026, the California Department of Insurance (CDI) announced the results of its Market Conduct Examination (MCE) of State Farm. Based on a review of 220 randomly selected claims, the MCE found 398 violations of the Unfair Insurance Practices Act and related regulations. Importantly, however, CDI’s action does not seek restitution for impacted policyholders whereas the County Counsel lawsuit does seek this remedy.
County Counsel’s lawsuit is available here: State Farm Complaint
Contact: Scott Kuhn, Assistant County Counsel, [email protected] or 323-719-9606.
For more information on County Counsel’s Affirmative Litigation and Consumer Protection Division, please visit: counsel.lacounty.gov/alcp.
