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.
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