WASHINGTON, DC – Last week, new reporting from the Los Angeles Times revealed that California fire victims believe state regulators have ignored their complaints about State Farm’s claims handling practices, exposing a pattern of regulatory failure that has left disaster survivors vulnerable to insurance company abuse.
The Times reporting underscores findings from Unlocking America’s Future’s investigation into California’s insurance crisis, which documented how insurance companies have exploited regulatory gaps to maximize profits while leaving policyholders underinsured and unprotected. The investigation found that insurers have collected billions in premiums while systematically denying claims and withdrawing coverage from high-risk areas.
In the wake of the report, two California state senators have called for an investigation into the state insurance department’s handling of complaints.
“California’s insurance regulators have repeatedly sided with insurance corporations over disaster survivors, allowing companies like State Farm to deny legitimate claims and abandon the market with impunity,” said Kyle Herrig, spokesperson for Unlocking America’s Future. “Fire victims are finding that the state agencies and elected officials meant to protect them are instead protecting insurance company profits.”
State Farm, one of California’s largest insurers, has been at the center of the crisis. The company announced plans to drop 72,000 homeowner policies in California, citing wildfire risk, even as it reported massive profits. Fire victims now report that when they filed complaints about the company’s claims handling with state regulators, their concerns were dismissed or ignored entirely.
A Long Time Coming: Even before devastating wildfires ravaged Los Angeles last year, insurers covering homes in the region’s foothills were threatening to abandon the state. Major private property insurers in the state have either stopped writing new policies entirely or severely restricted new coverage in California. In 2023, private insurers issued fewer than 750,000 new residential insurance policies, the lowest number since at least 2015.
More from Unlocking America’s Future:
Home Insurers Save Billions By Forcing California Families Back Into Toxic Homes
California’s Insurance Crisis: How Homeowners Pay More For Less While Insurers Profit
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