State Farm said it has paid more than $5 billion to policyholders affected by California wildfires earlier this year, as regulators in Los Angeles County and at the state level scrutinize its handling of catastrophe claims.
The disclosure comes as the carrier faces questions over delays, underpayments and denials alleged by some wildfire survivors.
Los Angeles County Counsel has opened a civil investigation into State Farm General Insurance Co., focusing on claims tied to the Easton and Palisades fires in January. The probe is examining whether the company’s practices may violate California’s Unfair Competition Law, including the role of both human adjusters and any artificial intelligence tools in claims handling.
County officials said the review follows “growing complaints from residents about delays, underpayment and denial of legitimate wildfire claims.”
In a statement, Los Angeles County Board of Supervisors Chair Kathryn Barger said the county “has heard loud and clear from wildfire survivors that State Farm’s delays are standing in the way of rebuilding,” adding that “fair and timely insurance payments aren’t a privilege; they’re a right” and that the insurer “must act quickly so survivors can rebuild their homes and their lives.”
Earlier this year, State Farm reported that it had paid $2.45 billion across 12,200 claims stemming from the January Los Angeles wildfires, underscoring the scale of losses tied to that event alone. The insurer said it covers about 250,000 homes and 880,000 vehicles in Los Angeles County, highlighting the concentration of its exposure in the region.
In a detailed records request sent to State Farm and its general counsel, the county asked for “any and all documents, reports, spreadsheets, databases, summaries, dashboard or other records” that reflect aggregate information on wildfire-related claims. The request covers internal metrics, tracking tools and any materials used to monitor or evaluate the company’s response to the Easton and Palisades events.
Investigators also want to see training materials and communications provided to employees and contractors on fire- or smoke-damage property claims, including any updates made since the fires began on Jan. 7. The county is additionally seeking information on whether and how artificial intelligence has been deployed in the claims review and settlement process.
The county inquiry sits alongside a separate California Department of Insurance market conduct examination into State Farm’s wildfire claims practices, which is looking at patterns such as frequent reassignment of adjusters, inconsistent handling of similar claims and shortcomings in record-keeping or information-sharing among claims teams.
CDI has also set up a Smoke Claims Task Force and pursued legal action against the state’s Fair Plan over its own smoke-claim practices, signaling that concerns about post-wildfire claims handling extend beyond a single carrier.
“Recovery, following a catastrophe, doesn’t move in a straight line,” State Farm said in an online update on its California wildfire response. The insurer said “many families are engaged in the process of rebuilding and recovering from the devastation” and that “many families continue to navigate through parts of the claims process, with State Farm trying to address the needs of their unique circumstances.”
Beyond incurred losses, State Farm said it has contributed $2 million this year to nonprofit organizations in California that support disaster relief and recovery. The company did not provide additional detail on the ongoing investigations in its public statement.
