California Probes State Farm Wildfire Claim Practices

California's Department of Insurance has launched a formal market conduct examination into State Farm’s handling of thousands of claims from the January Eaton and Palisades wildfires, after widespread complaints of delays, inadequate compensation, and poor communication. Insurance Commissioner Ricardo Lara stated the probe will focus on frequent reassignment of adjusters, inconsistent claim management, and poor record-keeping, all of which have left many survivors in uncertainty and financial distress. State Farm, the state's largest home insurer, has paid out nearly $4 billion but faces accusations of underpaying or denying legitimate claims and requiring excessive documentation. The investigation follows approval of a controversial 17% rate hike for State Farm, which consumer advocates and affected homeowners have criticized. Lawmakers and advocates are closely monitoring the process, seeking reforms and greater consumer protections as natural disasters become more frequent. The examination could take several months and may lead to reforms or enforcement actions if violations are found.