California regulators move to suspend State Farm over mishandled wildfire claims

Tue, 05 May 2026 04:05:00 +0200

California insurance regulators have filed a legal action seeking to suspend State Farm's license for up to a year and impose the largest fine ever against a state insurer. The Department of Insurance investigation reviewed 220 sample claims from the January 2025 Los Angeles County wildfires, finding 398 violations of state law in nearly half of the cases. Allegations include delayed payments, underpayments, poor communication, excessive use of adjusters, and denials of coverage for smoke damage and hygienic testing. State Farm General, the California home insurance subsidiary, handled over 11,000 claims from the fires that damaged or destroyed more than 16,000 homes and caused 31 deaths. The violations carry fines ranging from $5,000 to $10,000 per incident if willful, potentially totaling millions of dollars. The case will be reviewed by a state administrative law judge, who will recommend a penalty to Insurance Commissioner Ricardo Lara. State Farm has disputed some findings but adm