CalMatters: L.A. fire survivors accuse State Farm of delaying claims. Should it get OK for a rate hike?
FOR IMMEDIATE RELEASE
May 6, 2025
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CalMatters: L.A. fire survivors accuse State Farm of delaying claims. Should it get OK for a rate hike?
An explosive new exposé from CalMatters reports that State Farm may be slow-walking payments to L.A. fire survivors, with allegations of State Farm mishandling claims, especially around smoke damage.
Meanwhile, State Farm has requested a 17% rate hike on homeowners, and an administrative law judge with the Department of Insurance is expected to announce his decision to approve the rate hike any day now. Fire survivors, advocates, and several state legislators have called on Insurance Commissioner Ricardo Lara to rescind his conditional approval of the rate hike.
Excerpts:
Rossana Valverde’s Pasadena home of 35 years is still standing after Los Angeles County’s devastating January fires — but more than 100 days later, she and her husband still can’t move back in.
That’s because they’re waiting for their insurer, State Farm, to approve and process their claims. [...]
She said the company’s adjuster — the second one they were assigned — hardly returns emails and phone calls from her or the public adjuster she’s enlisted for help. [...]
There are so many complaints, including a lawsuit, about State Farm delaying or denying claims after the LA-area fires, especially related to smoke damage, that fire survivors, three state lawmakers and others have asked Insurance Commissioner Ricardo Lara to investigate. They pointed out that the company is awaiting approval for its request to raise its rates on an emergency interim basis and urged Lara to rescind his conditional approval. An administrative law judge is expected to decide on the rate hike soon.
The Insurance Department routinely investigates insurance companies’ response to disasters, which can lead to deeper examinations of their conduct and millions of dollars of additional payments. But this time around, State Farm is facing complaints as it happens to be seeking to raise its rates an average 17% for homeowners.
Under growing pressure to investigate, Lara sent a letter to State Farm Chief Executive Dan Krause last week, asking for details about how the company is handling claims. [...]
State Sen. Sasha Renee Perez, a Democrat representing Pasadena who co-wrote the letter asking Lara to investigate State Farm and withhold a rate increase, told CalMatters: “Everybody realizes we’re in a home insurance crisis. (Nobody is) saying there should never be a rate increase.” But she said her constituents have been good customers who “feel like they’ve been left in the cold.”
Read the full piece here.
“Insurance policyholders expect the protection they’ve paid for to come through for them when they need it most – especially after a horrific disaster like the L.A. fires,” said Sophia Wilson, spokesperson for the Insurance Fairness Project. “People who have lost their homes are living in a nightmare, and it’s not right that they have to spend energy and time fighting with insurance companies to make good on the coverage they paid for. Meanwhile, the insurers demand rate hike after rate hike, with little pushback from regulators. Rate hikes are not going to fix the insurance crisis; it’s time for lawmakers to get serious about finding real solutions.”
National Polling
The Insurance Fairness Project’s recent poll found that insurance is top of mind for American voters keenly aware of their vulnerability:
78% of voters are at least somewhat concerned about rising property insurance prices, with 40% saying they are “very concerned”;
66% are concerned about increasing extreme weather events;
74% have either been personally impacted by extreme weather or know someone else who has;
A majority of voters think the federal government and state governments are doing too little to protect consumers and hold insurance companies accountable.
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
