California seeks millions in penalties from State Farm over alleged claims violations after LA wildfires

California is seeking millions of dollars in penalties from State Farm after an investigation found the insurance company was slow to investigate and underpaid claims from the 2025 Los Angeles-area wildfires , regulators announced on Monday. State Farm violated the law hundreds of times in a sampling of 220 cases, the state’s insurance commissioner, Ricardo Lara, said. The maximum penalty amount allowed by law would be about $4m if State Farm is found to be “willful” in violating state law. Regulators may also temporarily suspend the company’s license, effectively prohibiting the state’s largest home insurer from writing new policies for a year in California . The two fires were devastating – they led to the deaths of 31 people and destroyed more than 16,000 structures. State Farm said in a statement it rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims” and called the state’s insurance market “dysfunctional”. The company said it has paid out more than $5.7bn on 13,700 auto and home insurance claims related to the fires. “The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market,” the statement said. …