The California Insurance Commissioner announced a formal investigation into State Farm’s handling of thousands of insurance claims from wildfire survivors affected by the Palisades and Eaton wildfires. The California Department of Insurance has initiated a Market Conduct Examination of State Farm General Insurance Company, expanding its ongoing investigation into consumer complaints against the insurer.

A Market Conduct Examination is one of the Department’s most effective tools, involving a thorough, fact-based review that typically takes several months. The Department is currently at a different stage in the claims process for these wildfires, which allows for a more comprehensive regulatory review for an examination of this magnitude and importance. Insurers are now making payment decisions, enabling the Department to evaluate adjuster practices and thoroughly assess State Farm’s methods across a wide range of claims handling.

While the Department has received general allegations from wildfire survivor groups regarding State Farm’s processing of claims, a formal complaint is needed for the Department to take action and advocate for consumers. Complaints can be submitted at insurance.ca.gov or by calling 800-927-HELP.

“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 or information-sharing among claims teams. These issues create unnecessary stress, prolong recovery, and erode trust,” said Commissioner Lara. “The strongest evidence we can present is the voice of consumers themselves. 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.”

Since January, the Department has already recovered more than $40 million for survivors of the Eaton and Palisades fires through its intervention on formal consumer complaints. As of May 12, 2025, insurance companies have paid out nearly $17 billion to residential and commercial insurance policyholders impacted by the Eaton and Palisades Fires.

One area of growing concern relates to how some insurers, including State Farm, are handling smoke damage claims. The unprecedented urban impact of these wildfires has created new challenges and a lack of consistency as to how insurance companies are handling these claims — leading to confusion and delays for homeowners.

In response to concerns over how smoke claims are being handled, The Insurance Commissioner announced the creation of a Smoke Claims & Remediation Task Force last month, bringing together public health experts, remediation specialists, and consumer advocates to develop fair, science-based, and consistent standards for smoke remediation.

The Insurance Commissioner’s action is part of a multi-pronged effort to expand insurance options for consumers and require more accountability for all companies in the insurance market. A strong, accountable insurance market supports recovery from wildfire and other climate-driven risks.