Los Angeles County has sued State Farm over its handling of claims from the 2025 Eaton and Palisades Fires, accusing the insurer of delaying, underpaying and denying benefits owed to wildfire survivors.
The lawsuit, filed Monday in Los Angeles County Superior Court, alleges State Farm engaged in unfair business practices while handling claims for homes destroyed, damaged or contaminated by smoke and ash.
County officials accuse State Farm of repeatedly changing adjusters, creating barriers between policyholders and claims representatives, withholding additional living expense benefits and misrepresenting policy terms in ways that discouraged some customers from pursuing claims.
The complaint also alleges State Farm suppressed smoke-damage claims and pressured some residents whose homes remained standing to return to properties they believed were contaminated and unsafe.
State Farm denies systematically mishandling wildfire claims. The company said it strongly disagrees with the county’s allegations and has paid more than $6.2 billion for homes, vehicles and other property damaged in the Los Angeles fires, including about $1 billion for smoke-related losses.
State Farm received approximately 11,300 residential claims connected to the fires, nearly one-third of all residential claims submitted to insurers.
The January 2025 Eaton and Palisades Fires killed at least 31 people and destroyed or damaged more than 16,000 structures across Los Angeles County.
The county lawsuit follows an investigation that reviewed hundreds of complaints and documents from State Farm policyholders, along with information submitted by wildfire survivor organizations.
County Counsel brought the case under California’s Unfair Competition Law and False Advertising Law. The county is seeking restitution for affected policyholders, an order stopping the practices alleged in the complaint and civil penalties of up to $2,500 for each violation.
Restitution could return money to policyholders if the county proves State Farm improperly withheld benefits or other funds they were entitled to receive.
The lawsuit comes as State Farm faces a separate California Department of Insurance enforcement action over its handling of wildfire claims.
State regulators reviewed 220 randomly selected claims and reported hundreds of alleged violations involving delays, underpayments, communication with policyholders and smoke-damage claims.
That proceeding can result in regulatory penalties, while Los Angeles County’s lawsuit also seeks restitution for policyholders.
State Farm has not yet filed its formal response to the county’s lawsuit.
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