LOS ANGELES (KABC) — The Office of the County Counsel for Los Angeles County has launched an investigation into State Farm, the largest private insurer in California, looking into its handling of insurance payouts after the Eaton and Palisades fires.
“Altadena residents have already endured unimaginable loss, and they shouldn’t have to fight their own insurance company to recover,” said L.A. County Supervisor Kathryn Barger. “The County has heard loud and clear from wildfire survivors that State Farm’s delays are standing in the way of rebuilding. Fair and timely insurance payments aren’t a privilege; they’re a right. State Farm must act quickly so survivors can rebuild their homes and their lives.”
The probe comes on the heels of growing complaints from fire victims about “delays, underpayments, and denials of legitimate wildfire claims.”
It will also look for any violations of California’s Unfair Competition Law.
“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 Supervisor Lindsey Horvath.
“Families who lost everything in the Palisades and Eaton Fires deserve fair and timely treatment – not delays, denials, or underpayments. It’s time for State Farm to live up to its commitment to be a ‘good neighbor’ and do right by its customers who have lost so much.”
Jesse Albert saw his Altadena home burn to the ground in the Eaton Fire but says State Farm is lowballing him in its insurance payout.
“It is truly reprehensible,” he told Eyewitness News. “We’ve been offered little less than half of what it would cost to rebuild our home, so we’re stuck with an empty lot.”
Estimates to replace his home are coming in at more than $3 million.
Albert says State Farm told him he hit his policy caps, even though he had checked with the company just last year.
“I sent an email to my agent saying, ‘Is this enough to rebuild our house? Should something happen?’ He said, ‘More than enough.’ And then here we are with a policy that is not even half of what it will cost to rebuild our house,” said Albert.
Albert, along with several other fire victims, is now suing State Farm.
They are accusing the company of “suppressing home reconstruction cost estimates… which in turn induced customers to accept lower coverage limits.”
Eyewitness News reached out to State Farm for comment, and the company issued the following statement:
“The goals of this investigation are unclear but what is clear is that it will be another distraction from our ongoing work in California to help our customers recover from this tragedy. State Farm is committed to paying customers what they’re owed. We’re handling over 13,500 claims and have paid almost $5 billion to California customers affected by the January wildfires. Nearly 200 Claims professionals are still on the ground, supported by teams nationwide, helping customers recover. We’re here every step of the way and working with elected officials to build a more sustainable insurance market in California.”
Albert is left questioning why it took the county this long to investigate State Farm’s behavior.
“It’s been 10 months and you’re just now starting to investigate?” he said. “We’ve been screaming from our now-nonexistent rooftops that there is a problem here.”
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