L.A. County probing State Farm handling of January fire claims

Los Angeles County announced Thursday it is opening an investigation into how State Farm General has treated January wildfire victims after complaints that their claims have been delayed, denied and underpaid.

- BY LAURENCE DARMIENTO

The state’s largest home insurer was notified of the probe in a letter that included demands for a wide range of data and documents to determine whether the company has violated the state’s Unfair Competition Law.

Violations can result in injunctive relief, restitution and civil penalties of up to $2,500 per day per violation.

Assistant County Counsel Scott Kuhn said the probe's goal is not necessarily to go to court, but to alter the company’s practices and ensure policyholders receive the payouts they are due.

“We want State Farm to take care of its customers as soon as possible, because time is of the essence. We want residents to be able to get back in their homes and start the rebuilding process,” said Kuhn, who is leading the investigation. “We certainly would like to avoid litigation and just have State Farm do right by its customers.”

Bob Devereux, a State Farm spokesperson, said in a written statement that “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.”

The January fires that damaged or destroyed nearly 13,000 homes and killed 31 people resulted in estimated losses of $7.6 billion for the insurer. State Farm said Thursday that it has received more than 13,500 claims and paid nearly $5 billion to victims.