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Los Angeles Times
5 days ago
- Business
- Los Angeles Times
L.A. County fire victims sue State Farm for negligence, claim they were ‘grossly underinsured'
Six couples and one individual who lost their homes in the devastating Los Angeles fires are suing State Farm, claiming that they were 'misled' by the insurance company and that their homes were deliberately and 'grossly underinsured.' The lawsuit, filed in Superior Court in Los Angeles on Monday, alleges that State Farm General — the California home insurer that is part of the larger State Farm Group based in Bloomington, Ill. — took advantage of homeowner's lack of knowledge about rebuilding costs and set projected replacement costs far lower than the actual costs, leaving fire victims without enough money to replace or rebuild their homes. State Farm, California's largest home insurer, has engaged in a 'multi-faceted illegal scheme' that is designed to 'reap enormous illicit profits by deceptively misleading over a million homeowners in California,' the complaint alleges. The lawsuit alleges negligence, breach of contract and several other causes of action, and seeks compensatory and punitive damages and reform of State Farm's policies. Representatives for State Farm did not immediately respond to a request for comment. This marks the second time L.A. fire victims have sued insurers because they believe they were systematically underinsured. USAA and two insurers affiliated with AAA were sued in early June by policyholders with similar claims that they did not have enough money to rebuild. Of the seven households who are a part of the lawsuit, four were from Altadena, two were from the Pacific Palisades and one was from Sierra Madre. Each of the homeowners had policies with State Farm, and some were underinsured by more than $2 million when their homes were completely destroyed by the Palisades and Eaton fires. In one instance outlined in the lawsuit, homeowners wrote to their State Farm agent prior to the January fires to confirm whether the dwelling limit of just over $1 million would sufficiently cover the cost of rebuilding their Altadena home. The agent confirmed the amount covered the total cost to rebuild. After their home burned down, the estimates the couple received to rebuild were in excess of $3 million, the lawsuit says. The lawsuit comes days after State Insurance Commissioner Ricardo Lara announced his department is launching a formal inquiry into how State Farm General is handling thousands of claims filed by fire victims after receiving complaints. As of June 12, State Farm said it has received more than 12,800 claims related to the fires and has paid over $4.03 billion to its California customers. State Farm has also been named as a defendant in an April lawsuit filed by homeowners who accuse dozens of insurers of colluding over the last several years to force them into the California FAIR Plan, the insurer of last resort that offers limited, but typically expensive, coverage. The homeowners claim the insurers refused to write new policies in fire-prone areas and then profited from the higher premiums while reducing their liabilities with the FAIR Plan in the event of a catastrophe like the January fires. The latest lawsuit against State Farm claims that the insurer's alleged collusion with other carriers to push homeowners onto the FAIR Plan meant the only policies left for the company were ones that 'carried deliberately suppressed coverage limits of sufficiently low magnitude,' posing a lesser exposure risk for State Farm. The average homeowner, the complaint states, would have little reason to question the replacement costs estimated by State Farm because it writes over a million California homeowners insurance policies each year by generating reconstruction cost estimates. The policyholders in the suit, as well as several other impacted homeowners, the lawsuit said, are unable to rebuild their homes without 'relief from the legal system.' Times staff writer Laurence Darmiento contributed to this report.
Politico
13-06-2025
- Politics
- Politico
The extreme weather survivors taking lessons from gun violence survivors
SURVIVOR STORY: There's a new climate advocacy group in town and it's taking inspiration from an unusual source on how to make disasters personal — the anti-gun violence movement. Extreme Weather Survivors, a network sponsored by the non-profit Tides Center that aims to connect and advocate for people after a natural disaster, kicked off last year and hit its stride following the Los Angeles firestorm. One of its co-founders and co-executive directors is Chris Kocher, the founding director of the survivor network at Everytown and Moms Demand Action, which have advocated for gun control and launched unsparing media campaigns centered on personal accounts from victims. This spring, Extreme Weather Survivors launched a five-figure ad buy with personal testimonies from people who lost homes in the fires appealing to Insurance Commissioner Ricardo Lara, who approved an emergency rate hike for State Farm following the fires. They celebrated a win on Thursday when Lara broadened an investigation into the insurer for what he called a 'troubling pattern' of mishandling claims. In Sacramento, the group co-sponsored SB 222, a bill by Sen. Scott Wiener to let individuals and insurers sue oil companies to recoup the costs of rebuilding after disasters super-charged by global warming, and invited survivors to share their own stories in a press conference and hearing on the bill (which stalled in the Senate Judiciary Committee in April). It's also backing a bill by Sen. Ben Allen to require insurance companies pay entire claims after disasters without requiring claimants to submit an itemized account of lost items. Known as 'The List,' the arduous demand is a dreaded aspect to the claims process that creates a major obstacle to receiving compensation. As the group is now gearing up for a summer of extreme heat and wildfires, POLITICO chatted with Kocher about his organizing strategy and the politics of disaster recovery. This interview has been edited for length and clarity. How are you applying organizing principles from the anti-gun violence movement here? What are parallels and differences? People are interested in making purpose of their pain, and they want to help other people who are going to go through it. When you have something like this has happened, and you have the feeling of control that is taken away, and you're choosing to be part of that advocacy effort to make this less likely to happen to someone else, it's a really important part of giving people back that sense of control and that the positive psychology behind that. Some of the differences is that when you have lost your home, which is the vast majority of people who we work with, just the sheer number of things to do, the permits, the dealing with toxicology reports, smoke damage, whether to rebuild or so, there's just a long, long list of things to do, and it means that time is the most valuable source that you have. Whereas with, I would say, at Everytown, the majority of people that we worked with had lost a loved one, and there was a lot of time people had after burying their loved ones. We're, for that reason, really making sure that our programs are as easy to join and be part of as possible. How did you pick the name and how are you thinking of climate change politics these days? We really felt like extreme weather is how people are experiencing it and people understand that this is a place for anyone who has been impacted to find their soft landing and to begin to rebuild and recover. I think there's a lot just to help more Americans understand this is the reality of climate change and this is how people are experiencing climate change right now, and helping people understand just how long and devastating that road to recovery is is an important part of the work as well. What's been your playbook in California? We really jumped in and within 48 hours had launched our Slack space, where we have more than 1000 folks who have survived LA fires in there with disaster recovery experts and mental health experts and other past fire survivors. We really came into this with the idea of helping people connect to people who have been through this before. It can be a really important part of making that steep climb from rebuilding a little bit less steep and a little bit less awful. The advocacy is something that some people are interested in, and some people aren't, and that's okay, and we support either way. What we're seeing is about half the people that are joining the organization and coming into the Slack space are interested in getting involved and sharing their story for advocacy. What's most surprised you? When we started this, I didn't expect that insurance was going to be the number one or number two thing that we heard from every single person that we talked to. They didn't understand it. They didn't have enough insurance when they needed it. It wasn't what they thought they had. They didn't know how to obtain the proceeds that they were entitled to. This is how they are experiencing this, as a kitchen table economic issue. What's next? Do you see this network getting involved in political races? It's not happening right now, but I wouldn't be surprised to see that happen in the future. I worked at Everytown alongside my team with Lucy McBath, who's now in Congress in Georgia, and Tom Sullivan, who's now run for state and won state office. I'm trying to help support people in reclaiming their power and reclaiming their story, and I think running for office is definitely a natural evolution of that. Legislation is a really important part of recovery, and a part of our work to make sure that we are legislating policy that puts survivors at the center of recovery, and I think that's something that will happen across the country. Did someone forward you this newsletter? Sign up here! THE DELTA BETWEEN THEM: The Senate and the Assembly officially passed their budget plan on Friday morning with key differences from the one Gov. Gavin Newsom put forth last month. One big one: Lawmakers rejected — for now at least — Newsom's proposal to fast-track a controversial project to reroute water around the Sacramento-San Joaquin River Delta to farms and cities south. It's a win for elected officials in the Delta region and environmental groups concerned the project will harm the local environment and communities. Instead, lawmakers said they'll consider it later in the legislative session. Backers of the proposal, including business and water interests, construction unions and some Los Angeles-area Democrats, are eyeing upcoming budget negotiations between legislative leaders and Newsom, hopeful that the governor's plan will win out as the two sides look to hammer out a deal by a July 1 deadline. — CvK TARIFF TUMULT: If you're hoping the Trump administration's tariff pause will make back-to-school shopping easier, you're probably out of luck. Port of Los Angeles Executive Director Gene Seroka said at a media briefing Friday that cargo arriving at the country's busiest port dropped 9 percent in May compared to last year. He expects a modest uptick over the next few months, but overall trade flow is expected to be lower than in previous years, as businesses remain skittish because of 30 percent tariffs Trump currently has imposed on Chinese goods and the threat of higher tariffs in the future. 'We'll likely see higher prices and fewer selections for both the back-to-school and Halloween season,' Seroka said. Treasury Secretary Scott Bessent told lawmakers Wednesday that the administration is 'highly likely' to push back a July 8 deadline the president set to impose reciprocal tariffs on countries that don't strike new trade deals with the U.S. Seroka cautioned, however, that unspecific assurances like Bessant's only 'adds to the complexity that we're all trying to deal with.' Seroka warned that the global trade upheaval is being acutely felt in the Los Angeles area. Real estate developers have told him that tariffs on Chinese steel, appliances and building materials have caused the prices to rebuild homes and businesses destroyed in the LA wildfires to 'skyrocket.' And he said a study of 25 shifts for dockworkers conducted at the end of May found that 'for every two workers who showed up for work, one went home without a job.' — AN MAKE THEM RAKE AGAIN: The wildfire work of California's National Guard got a shoutout in the U.S. District Judge Charles Breyer's order seeking to stop their deployment by President Donald Trump to Los Angeles, which later got overturned by a federal appeals court. Trump's deployment has redirected 300 National Guard soldiers from their usual assignment fighting fires to the streets of Los Angeles. Newsom has seized on the firefighting work left behind to criticize Trump for undermining one of his own stated priorities to improve California's forest management. — CvK IN THE REAR VIEW MIRROR: Former California Air Resources Board chair Mary Nichols thinks California officials overplayed their hand when negotiating with automakers to keep them on board with the state's electric vehicle mandate, writes California Climate's editor Debra Kahn in her column this week. 'Many people were acting on the assumption that it was going to be the Democrats continuing in power,' Nichols told Debra. 'So the state felt like they had all the cards in their hand, and then after the election, it was pretty hard to reset the conversation.' Read more from their chat about lessons learned in Debra's column this week. — Trump's immigration raids on California farms are threatening the nation's food supply. — The Trump administration wants to make it easier for companies to get autonomous vehicles on the road, a potential boon for Tesla. — California officials closed commercial Dungeness crab fishing along the Northern California coast after a young humpback whale got caught in a fishing line.
Fast Company
13-06-2025
- Business
- Fast Company
California launches probe into State Farm's handling of L.A. wildfire claims
California's top insurance regulator on Thursday launched an investigation into State Farm over the company's handling of claims from the January Los Angeles-area wildfires. The investigation comes after survivors of the Palisades and Eaton fires said that the state's largest home insurer was delaying and mishandling claims regarding damage to their homes and possible contamination from smoke. The blazes destroyed thousands of buildings around Los Angeles, killed 30 people and displaced thousands of others. They were estimated to be among the costliest natural disasters in U.S. history. California Insurance Commissioner Ricardo Lara said the investigation will review whether the company complied with state consumer protection and claim-handling laws. 'Californians deserve fair and comprehensive treatment from their insurance companies,' the Democrat said in a statement. 'No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up.' State Farm, which has about 1 million home insurance customers in California, said it will cooperate with the state's review. The insurer has received roughly 13,000 claims related to the fires and has paid out about $4 billion to customers, the company said. 'We're here to help our customers recover and we empathize with those who are rebuilding their lives,' State Farm said in a statement. 'Our focus continues to be on supporting our customers in their recovery from the largest fire event we have ever experienced.' Survivors of the Eaton fire in Altadena have raised concerns about possible lead, asbestos and heavy metal contamination in their homes because of smoke. State Sen. Sasha Renée Pérez, a Democrat representing Pasadena, in April called on Lara to launch a probe into the alleged mishandling of claims. 'The survivors of the Los Angeles County fires are experiencing financial and emotional hardships due to State Farm's delays and denials of their valid insurance claims,' she and other lawmakers said at the time. 'Despite years of faithfully paying premiums, they have been met with excessive documentation demands, denial of claims despite clear evidence, a convoluted and arduous claims process, and silence when seeking help after the disaster.' Lara said homeowners should file formal complaints regarding State Farm's handling of claims to help the state take action. The Department of Insurance announced a task force last month to recommend best practices for addressing smoke damage. A wildfire victims advocate praised the investigation as a 'critical step toward accountability.' 'State Farm is unjustly denying legitimate smoke damage claims, forcing families already harmed by the Eaton and Palisades fires to make the impossible choice of living in toxic homes or paying tens of thousands out of pocket for remediation. We stand ready to hold State Farm accountable,' Kiley Grombacher, co-founder of the California Fire Victims Law Center, said in a statement. Insurers including State Farm had difficulty doing business in California even before the wildfires. In 2023, State Farm and others stopped issuing residential policies because of the wildfire risk. Last year, Lara unveiled regulations aimed at giving insurers more latitude to raise premiums in exchange for more policies in high-risk areas. State Farm said at the time the company was struggling. The wildfires, which destroyed more than 16,000 buildings, made matters even worse. In May, state regulators allowed State Farm to raise premiums 17% statewide for its California home insurance customers to help the company rebuild its capital after the costly wildfires. State Farm initially sought a 22% rate increase for homeowners but revised it down a recent hearing before an administrative judge. The new rates in effect this month include a 38% hike for rental owners and 15% for tenants. People who lost homes in the fires sued in April, alleging State Farm and other insurers colluded to 'suddenly and simultaneously' drop coverage or halt writing new policies in fire-prone areas, including areas that burned. That left the homeowners underinsured and struggling to rebuild, the lawsuit alleges. The American Property Casualty Insurance Association, the largest national trade association representing home, auto and business insurers, called the lawsuits meritless, saying it monitors to ensure its members comply with the state's antitrust laws.
Newsweek
13-06-2025
- Business
- Newsweek
California To Investigate State Farm's Wildfire Insurance Claims
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. California regulators have launched an investigation into State Farm's handling of thousands of damage claims from policyholders affected by the devastating wildfires that ravaged Los Angeles County in January. Ricardo Lara, the state's insurance commissioner, said the inquiry was prompted by a growing number of complaints against the company in the wake of the deadly blazes. "Californians deserve to return to homes that are truly safe, not forced to handle smoke, soot, and ash on their own," Lara said in a news release. "Our goal is to close the protection gap and make sure insurance works the way it is supposed to, especially in the face of climate-intensified disasters." What Happened? The catastrophic wildfires that burned through Los Angeles County for days in January covered tens of thousands of acres of land, killed at least 29 people, destroyed thousands of properties and caused billions of dollars in damages. According to CoStar, the blazes wiped out almost $31 billion in property values, ravaging about 11,000 properties between homes and businesses. More than 95 percent of these real estate losses affected single-family homes. State Farm, the largest home insurer in the country, said it had received a total of 12,855 claims related to the fires as of June 10 and had already paid more than $3.96 billion in claims. The company has estimated that the January wildfires will cost it a total of $7.6 billion, though reinsurance payments from its parent company would lower the losses to about $612 million. A State Farm insurance company sign amid the rubble of a building destroyed by the Palisades fire on Sunset Boulevard in the Pacific Palisades neighborhood of Los Angeles on January 16. A State Farm insurance company sign amid the rubble of a building destroyed by the Palisades fire on Sunset Boulevard in the Pacific Palisades neighborhood of Los Angeles on January 16. FREDERIC J. BROWN/AFP via Getty Images While State Farm says it is paying claims to policyholders affected by the fires in keeping with its "promise to customers," several customers have accused the insurer of mishandling, delaying and denying claims in the weeks and months following the blazes, leaving them in precarious financial positions or forced to stay in dangerous homes. Anger against the company has been boiling over in California since January following reports that the insurer had cut hundreds of policies in areas affected by the fires only months before the blazes broke out. That anger is mounting as many policyholders feel they are not being treated fairly by the company, which has asked for a 17 percent emergency rate hike to stabilize its financial position in the state after the fires. What Is the Investigation About? Lara announced on Wednesday that the California Department of Insurance had initiated a market conduct examination of State Farm, expanding its ongoing investigation into consumer complaints against the insurer. This type of inquiry includes a "thorough, fact-based review" that typically takes several months, the department said. The commissioner said the department had received numerous complaints from policyholders, with "some troubling patterns" emerging from them, including "the frequent reassignment of multiple adjusters with little continuity in communication, inconsistent management of similar claims, and inadequate record-keeping or information-sharing among claims teams." These issues create "unnecessary stress" for policyholders, "prolong recovery, and erode trust," Lara said. The commissioner added that while the department had launched an investigation, it could take action and advocate for consumers only if it received a formal complaint. "I urge any wildfire survivor facing delayed payments, claim disputes, multiple adjusters, smoke damage issues, or any other problems to file a formal complaint with my Department," Lara said. Complaints can be submitted on the department's website at or homeowners can call 800-927-HELP. State Farm has said it is cooperating with the California Department of Insurance in the market conduct exam process. What Are People Saying? Insurance Commissioner Ricardo Lara said in a news release following Wednesday's announcement: "Californians deserve fair and comprehensive treatment from their insurance companies. No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up. "While there are national standards for insurance claims handling, they can be vague and inconsistently applied, especially during large-scale, climate-driven disasters. This examination will assess whether State Farm has complied with California's consumer protection and claims handling laws and will help determine if further reforms are needed as natural disasters increasingly disrupt insurance markets across the country." Assemblymember John Harabedian, a Democrat representing Pasadena, said in a news release: "Following the Eaton Fire, our community deserves clear communication and fair treatment to facilitate a swift rebuilding process. I have received numerous complaints from neighbors regarding the claims process. A market conduct examination will provide the clarity we urgently need. I am grateful to Commissioner Lara for taking action to demand transparency and ensure that families receive the answers they deserve." State Farm said in a news release on Thursday: "A fair review will find that thousands of State Farm customers are being helped by our teams on the ground in Los Angeles County and are very satisfied. Our efforts will remain on serving all our customers and meeting our obligations under the contract while providing the necessary information to the CDI. The Department routinely examines all insurance companies. These exams help ensure processes and procedures are in full compliance with state regulations." What Will Happen Next? The investigation launched by California regulators on Wednesday is expected to take months. Meanwhile, California homeowners who have insurance policies with State Farm are likely to face a rate increase this year as the carrier's request for a 17 percent hike received interim approval by the California insurance commissioner last month. The rate changes are expected to affect homeowners renewing their policies on or after June 1, 2025.
New York Times
12-06-2025
- Business
- New York Times
California Announces Investigation Into State Farm
Ricardo Lara, California's Insurance Commissioner, announced a formal investigation into State Farm on Thursday, as complaints continue to mount about the insurer's handling of claims from the catastrophic wildfires in Los Angeles. The so-called 'market conduct examination' is a tool used when there is evidence of broad consumer complaints, according to a spokesman for the department. It's the fourth time that State Farm General Insurance Company — the state's largest insurer, which covers one out of every five homes in California — has been the subject of such an investigation since 2014, said Michael Soller, a deputy insurance commissioner. 'Some troubling patterns that my staff will investigate include the frequent reassignment of multiple adjusters with little continuity in communication, inconsistent management of similar claims, and inadequate record-keeping,' Mr. Lara said in a statement. 'These issues create unnecessary stress, prolong recovery, and erode trust.' The multiple fires that erupted on Jan. 7 in Eaton Canyon and on a hillside in Pacific Palisades have left a burn zone unlike almost any other — over 16,000 homes, businesses and other structures were obliterated and many others were damaged by toxic smoke. The fires are being described as among the most destructive in California's history, and have displaced thousands of people. Complaints against State Farm have been growing from the first weeks after the fire. A group of survivors from Altadena, the community flanking Eaton Canyon where one of the blazes started, have collected over 400 complaints from victims whose homes were insured by State Farm. The homeowners, who first found each other on a WhatsApp group for pickleball enthusiasts before migrating to the gaming app Discord, describe a pattern of delays and foot-dragging that they say has worn them down. Among the complaints is a pattern of rotating adjusters — where the same damaged home is assessed by one adjuster, only to be passed off to another, then another, forcing the homeowner to start from scratch with each new consultant, said Joy Chen, a former deputy mayor of Los Angeles, who runs the Eaton Fire Survivors Network, which collected the accounts. Want all of The Times? Subscribe.
