California says insurance firm State Farm mishandled LA wildfires claims
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A search and rescue worker investigates the charred remains of a house, as the Eaton Fire continues, in Altadena, Los Angeles County, California, U.S. January 15, 2025. REUTERS/Daniel Cole
By Kanishka Singh
WASHINGTON, May 4 (Reuters) - The California Department of Insurance said on Monday it was seeking million of dollars in penalties against insurance company State Farm for allegedly mishandling claims related to the January 2025 Los Angeles wildfires.
The company denied that it mishandled or underpaid claims.
Here are some details:
• The January 2025 wildfires killed 31 people and destroyed or damaged more than 16,000 structures.
• Much of the damage was caused by the Eaton Fire in Altadena and the Palisades Fire in Pacific Palisades.
• State Farm policy holders filed about 11,300 residential claims related to the wildfires, nearly one-third of the 38,835 claims filed across all insurers, according to the department.
• The California Department of Insurance said its examiners reviewed a sample of 220 claims and found 398 violations of state law in 114 of those claims.
• The maximum penalty amount will be around $4 million if the company is found to be engaging in "willful violations" of state law.
• The department says it has filed an "Accusation and Order to Show Cause" against State Farm, which marks the first step toward a public hearing before an administrative law judge.
• California's homeowners insurance market is the most dysfunctional in the country, State Farm said in response.
• The company said the state Department of Insurance "should take responsibility for regulatory delays."
• "We reject any suggestion State Farm engaged in a general practice of mishandling or intentionally underpaying wildfire claims, and we will respond through the process," it said.
• State Farm said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.
(Reporting by Kanishka Singh in Washington)
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