California’s top insurance regulator launched a probe into the State Farm amid growing complaints over the insurer’s handling of claims stemming from this year’s wildfires in Los Angeles.
The big picture: California Insurance Comissioner Ricardo Lara launched a market conduct examination in response to significant consumer complaints against State Farm General Insurance Company.
- It’s the fourth time since 2014 that the state’s largest insurer, covering one in every five homes in California, has been the subject of such an investigation.
- The twin blazes striking Altadena and the Pacific Palisades in early January have led to more than 16,000 homes, businesses, and other structures destroyed with thousands of residents displaced.
- Among the issues raised are the continuous reassignment of multiple adjusters, leading to a lack of communication consistency, as well as inconsistent management of similar claims and inadequate record-keeping practices.
- A group of survivors from Altadena, where one of the blazes originated, reported more than 400 complaints from victims whose homes were insured by State Farm.
- Homeowners described a pattern of delays and low estimates from the insurer, leaving many feeling worn down by the process.
- One significant complaint was the rotation of adjusters assigned to the same damaged property, causing homeowners to start anew with each consultant.
- Additionally, homeowners received rebuilding estimates as low as $300 per square foot, well below the estimated $900 per square foot cost to rebuild a home, according to Joy Chen of the Eaton Fire Survivors Network.
What they’re saying: “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,” State Farm spokesman Steve Sarkissian told the New York TImes, noting the insurer had already doled out $4 billion in claims.
