Los Angeles County has sued State Farm, alleging the insurer advertised dependable claims service while delaying, underpaying and stonewalling wildfire survivors. State Farm denies it — and says it isn't marketing new policies in Rhode Island anyway.
Uprise RI · Kaelen Valeborn · September 3, 2026
Los Angeles County has sued State Farm, alleging the insurer advertised dependable claims service while delaying, underpaying and stonewalling wildfire survivors. State Farm denies it — and says it isn't marketing new policies in Rhode Island anyway.
State Farm does not actively sell new policies in Rhode Island, but the allegations in this case — vanished adjusters, halted living-expense payments, disputes over what counts as covered damage — map directly onto the hurricane and flood claims coastal Rhode Island homeowners face. State guidance says standard homeowners policies exclude flood damage and carry separate windstorm deductibles worth checking now.
Page 76 of a 107-page complaint filed in Los Angeles Superior Court on Monday quotes an insurance commercial. State Farm's "Halfway There" campaign, the county's lawyers write, sold the company as the insurer that "makes things right" while a fictional competitor bungled the job. Los Angeles County alleges that after the January 2025 Eaton and Palisades fires, some State Farm policyholders got the version the ads were mocking.
That is the heart of the case: not that State Farm refused to pay, but that it advertised one kind of claims service and, the county says, delivered another to people who had just lost their homes.
The complaint was brought in the name of the People of the State of California, acting through Los Angeles County Counsel Dawyn R. Harrison, against two companies: State Farm General Insurance Co., which writes California homeowners policies, and State Farm Mutual Automobile Insurance Co. It pleads three causes of action under California law — public nuisance, false advertising and unfair competition — and asks a judge for restitution to policyholders, an injunction, and civil penalties of up to $2,500 per violation. The county's own release does not put a dollar figure on the restitution. S&P Global, reporting on the complaint, said the county estimates it at no less than $160 million.
State Farm says it strongly disagrees with the county's characterization and will answer through the legal process. The company says it has paid more than $6.2 billion on claims from the fires, roughly $1 billion of that for smoke-related damage, and has closed about 78% of them.
Both of those things can be true at once. An insurer can pay out billions and still be accused of underpaying, delaying and stonewalling a meaningful share of the people it owed. Whether that is what happened is now a question for a California court, and no judge has ruled on it.
The complaint sorts the alleged misconduct into eight buckets. False advertising. Slow investigations and slow processing. Systematic underpayments. Adjusters swapped out again and again. Barriers that kept homeowners from reaching the adjuster they did have. Additional-living-expense payments the county calls inadequate — that is the coverage that pays for a hotel or rental while your house is uninhabitable. Misrepresentations of what the policy said. And what the county describes as suppression of smoke-damage claims, including discouraging the environmental testing that would show whether a standing house was safe to live in.
A county FAQ released alongside the suit offers one example the lawyers chose to lead with: a 97-year-old Palisades policyholder whose family said he could not return home and ran into obstacles getting both environmental testing and living-expense benefits. That is the county's account of one claim, not a court finding.
County Supervisor Kathryn Barger, whose district includes Altadena, said in the release that wildfire survivors should not have to fight their own insurer to get what their policy promises. Supervisor Lindsey P. Horvath said residents paid State Farm their premiums and were owed fair and timely treatment in return.
The fires began January 7, 2025, and destroyed or damaged more than 16,000 structures, most of them homes, according to the complaint. Emergency declarations issued the same day triggered California-specific protections for policyholders, and the county's case leans on those statutes. Those are California deadlines and California rules. They do not travel.
The county is not the only public body with a case open. On May 4, California Insurance Commissioner Ricardo Lara announced an administrative enforcement action after his department's examiners pulled a sample of 220 State Farm wildfire claim files. In 114 of them, the department said, examiners identified 398 alleged violations — missed claims-handling deadlines, low settlement offers, repeated adjuster reassignments, inadequate communications, problems with written denials and with the costs of smoke testing. Consumer complaints turned up 34 more.
The department filed an accusation and an order to show cause, the first step toward a hearing before an administrative law judge. Lara said the examination found a pattern of unlawful behavior. State Farm's May 4 response rejected the idea that it engaged in any general practice of mishandling or intentionally underpaying claims, described most of the issues as administrative or procedural, and said it had addressed or was addressing them through file reviews, supplemental payments where warranted, updated forms, training and oversight.
The two proceedings are built to do different things. The state's action seeks penalties and corrective measures. The county's lawsuit seeks money back for the policyholders themselves, which is why the restitution number matters more than the per-violation penalty.
The county had been circling this for a while. A November 13, 2025 letter from County Counsel asked State Farm for records on claim volumes and outcomes, its claims-handling manuals, adjuster practices, smoke-damage procedures, and whether artificial intelligence was being used to review claims. Five months later, on April 22, State Farm General President Dan Krause announced five recovery commitments — single points of contact, more regular communication, help rebuilding stronger — and acknowledged that a perfect process was nearly impossible at that scale. By July 28 the company's own recovery material conceded that customer feedback had been both positive and negative.
I went looking for how many Rhode Islanders carry a State Farm homeowners policy and instead found State Farm's own Rhode Island page, which says the company does not actively market new business in this state. Existing State Farm customers who move here can get a limited menu of auto and fire products on an accommodation basis. Everyone else is pointed to HiRoad, a State Farm affiliate that does market in Rhode Island. HiRoad is not a defendant in the California case.
So the honest local frame is not "your insurer is being sued." It is that this complaint is a detailed catalog of the ways a catastrophe claim goes sideways — the adjuster you can't reach, the living-expense check that stops, the fight over whether the damage counts — and every one of those failure points exists in a hurricane claim on Aquidneck Island or in Westerly as surely as it does in a fire claim in Altadena.
Start with which company issued your policy. The California complaint names two separate State Farm corporate entities and lumps them together only for the purposes of its allegations; in a real claim, the entity on your declarations page is the one that owes you.
Then the perils. Rhode Island's Department of Business Regulation says plainly that standard homeowners insurance does not cover flood damage. The state's coastal hurricane guidance adds that a homeowners policy may cover wind damage, while flood damage requires separate flood insurance. A single storm that peels shingles off with wind and then pushes Narragansett Bay into the basement produces two different claims under two different policies, and the cause of each piece of damage determines who pays. There is no state law requiring anyone to buy flood coverage, DBR notes, though a mortgage lender can require it.
Then the deductible. Rhode Island regulates residential property policies issued or renewed here under its own rules, including a regulation on hurricane and windstorm deductibles — the separate, often percentage-based deductible that applies when a named storm hits. That figure is on your policy, and it is frequently far larger than the ordinary deductible.
Then the paper trail. DBR's claims guide tells policyholders to photograph damage before anything is moved, keep receipts for emergency repairs, hold off on permanent repairs until the insurer has been consulted where possible, and keep the policy documents somewhere they will survive the storm. Read the Los Angeles complaint and you'll notice that nearly every alleged dispute — over smoke testing, over living expenses, over what the policy said — was ultimately a fight about documentation and who controlled it.
And if a Rhode Island claim stalls, the complaint channel runs through DBR's Division of Insurance, which accepts filings online or by phone and lists a dedicated contact for homeowners insurance concerns.
The county's FAQ anticipates that State Farm will have about 30 days to file its formal response in Los Angeles Superior Court. The California regulator's hearing before an administrative law judge had not been scheduled as of Monday. Neither proceeding has produced a ruling, and until one does, the only verified numbers in this story are the ones each side chose to release about itself: 398 alleged violations in 114 sampled files from the state, and $6.2 billion paid from the company.
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This bill allows policyholders to sue insurers for bad faith practices and mandates the use of licensed professionals for claim investigations.
This bill allows people to sue insurance companies for unfair practices and specifically defines prohibited bad faith actions.
Insurers must accept, deny, or request info on claims within 30 days or pay the policyholder $250 per day.
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When our elected representatives allow themselves to be deceived by the self serving claims of lobbying organizations like the NFIB at the cost of the people they represent, they need to be held accountable.