The Los Angeles County Counsel’s recent announcement that it has launched a civil investigation into State Farm’s wildfire claims handling marks a truly historic moment in insurance oversight. For perhaps the first time in modern memory, a county government rather than a state insurance commissioner or attorney general is investigating an insurer’s claims practices under California’s Unfair Competition Law. This move expands the oversight battlefield beyond the usual regulators and could reshape accountability for insurers after catastrophic losses.
The County Counsel’s November 13 letter to State Farm General Insurance Company was not subtle. It alleges potential violations of California insurance regulations involving delays in communication and claim decisions, switching adjusters in ways that burdened policyholders, misrepresentations of coverage, failures to pay required living expenses, and the refusal to properly investigate or pay for smoke damage. The letter demands records on claim counts, internal procedures, training materials, and even details about State Farm’s use of artificial intelligence in claim reviews. Los Angeles County gave State Farm just one week, until today, November 20, to respond.
This action follows months of consumer complaints about delays and denials in the wake of the January 2025 Eaton and Palisades wildfires. Those fires devastated hundreds of homes across Los Angeles County. While the California Department of Insurance announced its own Market Conduct Examination in June, the County’s step signals a deeper frustration with the pace of relief and a desire to protect residents more directly.
State Farm, for its part, issued a public response that tried to downplay the implications:
The goals of this investigation are unclear, but what is clear is that it will be another distraction from our ongoing work in California to help our customers recover from this tragedy. State Farm is committed to paying customers what they’re owed. We’re handling over 13,500 claims and have paid almost $5 billion to California customers affected by the January wildfires. 1
That statement is telling. State Farm’s emphasis on distraction suggests a defensive posture toward oversight and an approach that may not play well with wildfire victims who feel abandoned and frustrated regarding the speed and amount of payments. It also raises an important question: why are state regulators not doing more about this situation, given their power and responsibility to ensure fair claims handling? What does it say when a county government feels compelled to step in because those traditionally responsible are not seen as doing their job?
From a legal perspective, Los Angeles County is relying on the state’s Unfair Competition Law, which allows local governments to prosecute violations of law that harm consumers. County Counsel Dawyn Harrison’s letter makes clear that the county views delays, denials, and inadequate investigations as not just customer‐service issues but potentially unlawful business practices. The move is bold. If it holds up, it may open the door for other counties and cities to use their consumer‐protection powers to challenge insurers when disaster victims are left twisting in the wind.
It’s difficult to overstate how unusual this is. Traditionally, only the state insurance commissioner, the attorney general, or private litigants have pursued such claims. A county counsel invoking the Unfair Competition Law to police insurance claims handling could mark a turning point in post‐disaster accountability. It reflects a growing recognition that the ripple effects of poor claim handling extend far beyond the insurer–policyholder relationship. Instead, poor claims handling affects entire communities struggling to recover.
This development is worth close attention. Whether this county investigation leads to formal enforcement, restitution, or policy reform, it already sends a message that local governments are watching and may not wait for state regulators to act when disaster survivors are hurting.
Thought for the Day
“The measure of a society is found in how they treat their weakest and most helpless citizens.”
— Jimmy Carter
1 Hood, James R., L.A. County probes State Farm over wildfire claims handling, ConsumerAffairs (Nov. 14, 2025). Available online at https://www.consumeraffairs.com/news/la-county-probes-state-farm-over-wildfire-claims-handling-111425.html