The Los Angeles County Counsel’s latest announcement that it has launched a civil investigation into State Farm’s wildfire claims dealing with marks a very historic second in insurance coverage oversight. For maybe the primary time in fashionable reminiscence, a county authorities somewhat than a state insurance coverage commissioner or legal professional basic is investigating an insurer’s claims practices underneath California’s Unfair Competitors Regulation. This transfer expands the oversight battlefield past the same old regulators and will reshape accountability for insurers after catastrophic losses.
The County Counsel’s November 13 letter to State Farm Basic Insurance coverage Firm was not refined. It alleges potential violations of California insurance coverage laws involving delays in communication and declare selections, switching adjusters in ways in which burdened policyholders, misrepresentations of protection, failures to pay required dwelling bills, and the refusal to correctly examine or pay for smoke harm. The letter calls for information on declare counts, inside procedures, coaching supplies, and even particulars about State Farm’s use of synthetic intelligence in declare opinions. Los Angeles County gave State Farm only one week, till immediately, November 20, to reply.
This motion follows months of shopper complaints about delays and denials within the wake of the January 2025 Eaton and Palisades wildfires. These fires devastated a whole lot of properties throughout Los Angeles County. Whereas the California Division of Insurance coverage introduced its personal Market Conduct Examination in June, the County’s step indicators a deeper frustration with the tempo of aid and a want to guard residents extra instantly.
State Farm, for its half, issued a public response that attempted to downplay the implications:
The objectives of this investigation are unclear, however what is obvious is that it is going to be one other distraction from our ongoing work in California to assist our clients get better from this tragedy. State Farm is dedicated to paying clients what they’re owed. We’re dealing with over 13,500 claims and have paid nearly $5 billion to California clients affected by the January wildfires. 1
That assertion is telling. State Farm’s emphasis on distraction suggests a defensive posture towards oversight and an strategy that won’t play nicely with wildfire victims who really feel deserted and pissed off concerning the velocity and quantity of funds. It additionally raises an essential query: why are state regulators not doing extra about this example, given their energy and accountability to make sure honest claims dealing with? What does it say when a county authorities feels compelled to step in as a result of these historically accountable will not be seen as doing their job?
From a authorized perspective, Los Angeles County is counting on the state’s Unfair Competitors Regulation, which permits native governments to prosecute violations of regulation that hurt customers. County Counsel Dawyn Harrison’s letter makes clear that the county views delays, denials, and insufficient investigations as not simply buyer‐service points however probably illegal enterprise practices. The transfer is daring. If it holds up, it could open the door for different counties and cities to make use of their shopper‐safety powers to problem insurers when catastrophe victims are left twisting within the wind.
It’s tough to overstate how uncommon that is. Historically, solely the state insurance coverage commissioner, the legal professional basic, or personal litigants have pursued such claims. A county counsel invoking the Unfair Competitors Regulation to police insurance coverage claims dealing with might mark a turning level in publish‐catastrophe accountability. It displays a rising recognition that the ripple results of poor declare dealing with lengthen far past the insurer–policyholder relationship. As an alternative, poor claims dealing with impacts complete communities struggling to get better.
This improvement is price shut consideration. Whether or not this county investigation results in formal enforcement, restitution, or coverage reform, it already sends a message that native governments are watching and should not look ahead to state regulators to behave when catastrophe survivors are hurting.
Thought for the Day
“The measure of a society is present in how they deal with their weakest and most helpless residents.”
— Jimmy Carter
1 Hood, James R., L.A. County probes State Farm over wildfire claims dealing with, ConsumerAffairs (Nov. 14, 2025). Out there on-line at https://www.consumeraffairs.com/information/la-county-probes-state-farm-over-wildfire-claims-handling-111425.html
