California launches investigation into State Farm's treatment of L.A. wildfire survivors
During the investigation, formally known as a market conduct examination, regulators within the department will probe policyholders' complaints for potential violations of California Insurance Code. If violations are found, it could lead to higher payouts for homeowners. As of June 3, State Farm has already paid out $3.85 billion to consumers; the insurer previously estimated it will pay $7.6 billion in total claims related to the Eaton and Palisades Fires.
Insurance Commissioner Ricardo Lara said the examination will probe allegations that State Farm has made inconsistent decisions about similar claims, frequently reassigned new adjusters to homeowners' cases and failed to maintain adequate records and communications on customers' claims.
'Californians deserve fair and comprehensive treatment from their insurance companies. No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up,' Lara said in a statement.
For months, survivors of the Los Angeles wildfires have been campaigning for Lara to investigate State Farm. At first, they wrote letters and ran an ad campaign calling on Lara to deny State Farm's request to raise rates until such an investigation was conducted. Lara instead approved State Farm to go ahead with an interim 17% rate hike starting this month, saying he couldn't legally tie State Farm's rate hike request to the results of an examination. The rate hike is subject to a final hearing in October, where a judge will consider whether to grant State Farm a further increase that would bring the total rise to 30%.
Assembly Member John Harabedian, a Democrat representing Pasadena, said in a statement Thursday that his office had received numerous complaints from wildfire survivors and that he hoped the examination would bring clarity and transparency.
A spokesperson for State Farm did not immediately respond to a request for comment.
The Department of Insurance has frequently used market conduct examinations to probe the business practices of insurance companies following major wildfires. The department said the review 'typically takes several months.'
State Farm most recently faced an examination in the wake of several large fires in 2015 and 2017. In that investigation, regulators alleged several violations related to how State Farm agents recommended policy limits to customers that left many homeowners without enough money to rebuild after a fire.
In response, State Farm said it disagreed with the examination's findings and the suggestion that State Farm agents are responsible for making sure customers are adequately insured, pointing to a California court decision that held policyholders are responsible for making sure their policy limits are adequate. But it did issue $5.6 million in additional claims payments. Several other major insurers were investigated following the fires and paid millions in response to similar allegations.
Lara said the latest examination into State Farm will explore whether further reforms are needed to address claims handling given the increasing frequency of large natural disasters.
'While there are national standards for insurance claims handling, they can be vague and inconsistently applied, especially during large-scale, climate-driven disasters,' Lara said.
He urged consumers experiencing issues with State Farm's claims handling to submit a formal complaint by visiting insurance.ca.gov or calling 800-927-HELP so that the department can investigate their case.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
an hour ago
- Yahoo
German Economy Minister Reiche says social systems under pressure
German Economy Minister Katherina Reiche believes that social security systems in Germany are under pressure. The Christian Democrat (CDU) politician said after a company visit in the western city of Essen on Thursday that a comprehensive - and critical - review of Germany's social systems is due in the autumn. "They must deliver what the citizens expect from them: security and reliability. But we also know that reforms are needed," Reiche said. German Chancellor Friedrich Merz has spoken of a "reform autumn." "There is really nothing to add to that," she said. "Tipping point" The coalition has agreed to set up various commissions after the lower house of parliament, the Bundestag, returns from its July-August break, not only to examine the social security systems but also to develop reform proposals, said Reiche. She added that the reform of the social systems and the demographic imbalance is not solely an issue for the current government. "The challenge we are facing is that the so-called tipping point is getting closer, and we must therefore actively address the question of how we can combine different employment histories, labour demand, and immigration into such a good concept that we can maintain labour productivity at a high level in the future," she said. When asked whether the planned expansion of the mother's pension is still timely, Reiche said, "Measures that further burden the social security systems are indeed a challenge for our system." However, she noted that it is also primarily about individual workers. Criticism of pension proposal Reiche had sparked a broad debate with statements about increasing Germans' working life. German Finance Minister Lars Klingbeil said on Wednesday that it was very clearly set out in the coalition negotiations that there would be no increase in the retirement age. He stated that calls "from the sidelines" do not help. Reiche on tour The minister visited the medium-sized family business Agathon in Essen, a world-leading manufacturer of chocolate moulds for large-scale industrial production. The company relocated its headquarters from Bottrop to Essen at the beginning of the year and invested €15 million ($17.2 million) in the construction of a new production hall. Prior to this, Reiche visited German polyurethane and polycarbonate producer Covestro in Leverkusen. Solve the daily Crossword
2 hours ago
Judge allows the National Science Foundation to withhold hundreds of millions of research dollars
NEW YORK -- The National Science Foundation can continue to withhold hundreds of millions of dollars from researchers in several states until litigation aimed at restoring it plays out, a federal court ruled Friday. U.S. District Judge John Cronan in New York declined to force the NSF to restart payments immediately, while the case is still being decided, as requested by the sixteen Democrat-led states who brought the suit, including New York, Hawaii, California, Colorado and Connecticut. In his ruling, Cronan said he would not grant the preliminary injunction in part because it may be that another court, the Court of Federal Claims, has jurisdiction over what is essentially a case about money. He also said the states failed to show that NSF's actions were counter to the agency's mandate. The lawsuit filed in May alleges that the National Science Foundation's new grant-funding priorities as well as a cap on what's known as indirect research expenses 'violate the law and jeopardize America's longstanding global leadership in STEM.' Another district court had already blocked the the cap on indirect costs — administrative expenses that allow research to get done like paying support staff and maintaining equipment. This injunction had been requested to restore funding to the grants that were cut. In April, the NSF announced a new set of priorities and began axing hundreds of grants for research focused on things like misinformation and diversity, equity and inclusion. Researchers who lost funding also were studying artificial intelligence, post-traumatic stress disorder in veterans, STEM education for K-12 students and more. Researchers were not given a specific explanation for why their grants were canceled, attorney Colleen Faherty, representing the state of New York, said during last month's hearing. Instead, they received boilerplate language stating that their work 'no longer effectuates the program goals or agency priorities." NSF has long been directed by Congress to encourage underrepresented groups like women and people with disabilities to participate in STEM. According to the lawsuit, the science foundation's funding cuts already halted efforts to train the next generation of scientists in fields like computer science, math and environmental science. A lawyer for the NSF said at the hearing that the agency has the authority to fund whatever research it deems necessary — and has since its inception in 1950. In the court filing, the government also argued that its current priorities were to 'create opportunities for all Americans everywhere' and 'not preference some groups at the expense of others, or directly/indirectly exclude individuals or groups.' The plaintiff states are trying to 'substitute their own judgement for the judgement of the agency," Adam Gitlin, an attorney for the NSF, said during the hearing. The science foundation is still funding some projects related to expanding representation in STEM, Cronan wrote in his ruling. Per the lawsuit filed in May, for example, the University of Northern Colorado lost funding for only one of its nine programs focused on increasing participation of underrepresented groups in STEM fields. The states are reviewing the decision, according to spokespeople from the New York and Hawaii attorney general offices. The National Science Foundation declined to comment. ___ The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute's Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
Politico
2 hours ago
- Politico
Democratic governors advise strong counteroffensive on redistricting
Kelly didn't cite California Gov. Gavin Newsom by name, but he is the most high profile, and likeliest, example of a Democrat considering a counteroffensive remapping effort to squeeze more seats from a blue state. On Thursday, Newsom said he'd seek a November special election to have voters approve a new House map that would boost Democrats' numbers. It's an expensive and potentially perilous gamble that his Democratic colleagues throughout the country appear to be backing — a notably more aggressive posture for the party. Various mid-decade redistricting efforts could launch a partisan arms race, as the parties look to redraw competing congressional maps to their own advantages. Democrats face a tougher path, as several blue states are bound by independent redistricting commissions and state constitutions, which would prevent them from quickly remaking maps. By contrast, discussions are already underway in several other Republican-controlled states that could follow Texas' lead, including Missouri, Indiana and Florida. Minnesota Gov. Tim Walz acknowledged there's 'validity' to concerns that Republicans might gain even more seats, should redistricting wars escalate. But, Walz and Kelly said, 'there's a bigger risk in doing nothing.' 'We can't just let this happen and act like it's fine, and hope that the courts fix it,' Kelly said. 'We have no idea, quite honestly, at this point, what the courts might do, but by virtue of us responding in kind, we do send a message. We're not going to take this line down.'
