By Laurence Darmiento, LOS ANGELES TIMES
Los Angeles County announced Thursday it is opening an investigation into how State Farm General has treated January wildfire victims after complaints that their claims have been delayed, denied and underpaid.
The state’s largest home insurer was notified of the probe in a letter that included demands for a wide range of data and documents to determine whether the company has violated the state’s Unfair Competition Law.
Violations can result in injunctive relief, restitution and civil penalties of up to $2,500 per day per violation.
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Attorney Harvey Rosenfield, founder of Los Angeles advocacy group Consumer Watchdog, said the county’s action is a step up from a market conduct exam because it is a civil action that can result in a court order changing insurer practices, refunds to consumers and larger penalties. Additionally, if criminal fraud is discovered, that can be prosecuted.
“State Farm is now in dangerous territory. Every denial of a survivor’s claim, every delay of a survivor’s claim can result in massive financial consequences for the company,” said Rosenfield, also author of Proposition 103, the 1988 ballot measure that governs home insurance in the state.