State Farm Faces Loss of California License After Mishandling Wildfire Claims
Provider would be banned from doing business in the state, and receive slap-on-the-wrist fine for massive fraud in Los Angeles County
WASHINGTON, D.C. — The California Department of Insurance yesterday announced it would seek to suspend State Farm Insurance’s license to operate in the state for up to a year and would fine the company. The sanctions follow an investigation that looked into 220 sample claims submitted to State Farm, where investigators found 398 violations of state law, according to a press release.
After the L.A. fires, State Farm received 11,300 residential claims. In response, Rick Morris, insurance campaigner with Public Citizen’s Climate Program, issued the following statement:
“If this sample is representative of all of the claims made of State Farm’s actions after the L.A. fires, the scale of corporate misconduct by the company is massive. State Farm raked in enormous profits last year, and the potential fines Commissioner Lara proposes are frivolous in comparison. Lara should investigate whether State Farm committed many more violations and, given the sheer scale of the wrongdoing, whether it was willful, not just the work of rogue adjusters as State Farm wants us to believe.
“Climate change is driving an insurance crisis that’s making life unaffordable for working people. California homeowners deserve better than an insurance system rife with fraud and a regulatory system rigged by the industry.”
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