People, who homes were destroyed by the Eaton Fire, are having trouble collecting their insurance, which is also an ongoing problem in Pacific Palisades. (AP Photo/Noah Berger)
For many who would like to rebuild after the Palisades/Eaton Fires, insurance companies are holding up the process.
One insurance company in particular, State Farm, seems to be causing a hardship to people who paid premiums for years. The company either does not pay out the full amount or offers such a low payout, it becomes impossible to rebuild.
The Eaton Fire Survivors Network click here wrote that this is a larger issue than just this state. “California is the largest home insurance market in America. What happens here sets the standard for the entire country. If State Farm can abandon policyholders, stall claims, and still walk away with a billion-dollar windfall, every American who pays premiums will be at risk.”
This editor, who lost her home, has reported before that her family has had two agents, five adjusters and was most recently told that more review needs to be done on the claim. (We paid 30 years on the policy.)
Others have also suffered similar problems. One wrote, “Look at how our insurance company is handling payment of dwelling claims. They start with a fantasy lowball estimate of cost for square foot to rebuild ($350)—which no one believes can be done—and say that if we want to get the full amount of the policy, we have to start rebuilding.”
A resident wrote “I am still negotiating with them (State Farm) to get a realistic payout to rebuild. They offered us such a low ball per sq foot settlement that it leaves us a 40% shortfall.”
Another said, “We’re on our seventh adjuster.” When the family asked the adjuster specifically about the foundation permit fee and other coverage monies, they were told it was only payable if and when rebuilding occurs. They asked, “where does it state that in policy?” The adjuster told them it wasn’t in the policy because it was just ”common sense.”
Joy Chen sent a letter to Commissioner Ricardo Lara, documenting 400+ first-hand accounts click here.
Congressman John Garamendi, who served as a former Ca. Insurance Commissioner told Altadena residents, “Under California’s Proposition 103, the Insurance Commissioner has clear authority. He can compel insurers to pay claims fully and promptly and block any rate increases until survivors are made whole. There should be no doggone rate hikes for companies that break their promises.”
Lara, in a June 16 story said has initiated a formal Market Conduct examination of State Farm. Depending on the results, his office could require State Farm to pay out claims.
It’s now six weeks later, and people still have no answers from Lara.
CTN asked the question (below) to Governor Gavin Newsom’s Deputy Director of Communications Daniel Villasenor in a July 26 email.
People in Pacific Palisades who have lost their homes are not getting insurance money simply because insurance is not paying. Companies tell people their account is under advisement. As you might guess that makes rebuilding difficult. Could the governor issue an executive order, telling insurance they have to pay?
Villasenor said he’d pass on the note to the Governor. CTN sent a follow-up email to Villasenor about Altadena, asking him to take the same message to the Governor.
From the Eaton Fire Survivors Network “After faithfully paying premiums for years, survivors are now being denied the coverage they paid for.
- FEMA can’t fill the gap.
- Philanthropy shouldn’t bail out private corporations.
- Regulators are stalling while families face financial ruin, serious health risks, and homelessness just one step away.
“This isn’t just about broken promises. It’s about lives shattered.”
Why won’t Newsom or Lara require insurance companies to pay out?Villasenor responded July 27, “We have your question noted on our end.”
To fill out a New York Times survey about insurance click here.
Thanks for reporting on State Farm’s refusal to pay. We are all sitting on the sidelines waiting to start our rebuilds. Not to be a conspiracy theorist, but I believe it’s all “by design.” State Farm refuses to pay causing homeowners to feel the need to even abandon the idea of rebuilding. Lara or Newsom don’t enforce State State Farm to pay so the government can swoop in for land banking. That’s what I think is really going on.
How much did State Farm contribute to Ricardo Lara’s campaign?
How much profit has State Farm made over the past decade? 2 decades? Would love to see their P&L statements for The Palisades.
If Newsom or Lara had the ability to seem like political heroes by forcing State Farm, or other insurers, to pay policy limits they would have already snapped their fingers.
It is pointless to beg Newsom and Lara to intercede on the part of those harmed by the Palisades Fire.
Newsom and Lara have heard the complaints and they have moved on to other hobbies.
What many residents of the Palisades are discovering is that many insurance companies are unwilling to honor the contractual policy limits they have written
And there is a dawning realization that the state has no ability to force insurance companies to honor the contracts the insurers have written
Rather than asking Lara, Newsom and the public for sympathy, it might be more productive for energetic Palisadians to rattle the cage and appeal to the self-interest of the public at large by asserting that “if they can do this to us, they will do it to you”.
Lara is focused on doing the least damage to his reputation before he is termed-out in 2026.
The least damaging thing that Lara can do is to give State Farm, and other insurance companies, anything they want
The fact that Lara is ignoring the thoughtful and well-intentioned efforts of Joy Chen and the Eaton Fire Survivors Network suggests that he is focused on other matters (besides spending much of his time at insurance, climate change and LBGTQ conferences).
State Farm, in particular, has threatened to stop writing homeowner insurance in California unless homeowner insurance policy rates are allowed to rise substantially.
Lara does not want to be the catalyst that prompts State Farm to abandon the California homeowner insurance market and send the market into a meltdown.
One way for Lara not to be the catalyst for the demise of the homeowner insurance market in California is to cave into the demands of insurance companies
One way that Lara is caving into the demands of State Farm, and other insurers, is that Lara’s Department of Insurance just approved the use of Verisk’s Wildfire Risk model.
It is worth recognizing that a wildfire risk model allows an insurance company to price homeowner insurance in as nuanced a way it wants. By the zip code, block or house.
A wildfire risk model is a tool for the insurance companies to bespoke price gouge homeowners.
And Lara and his CDI just allowed insurers to use a wildfire risk model
Additionally, Verisk owns Xactimate, the replacement cost valuation tool that is the source of the vexing “lowball” price-per-square-foot rebuild estimates
Within a day of the CDI approval of the Verisk Wildfire Risk model, Mercury insurance announced that it was going to file new homeowner policy rates using this tool.
Lara and the CDI are aware that State Farm just implemented a 27.2% increase in homeowner policy premiums in Illinois.
State Farm asserts that it has lost money in Illinois for years and it is now determined to achieve some semblance of profitability
Lara and the CDI are aware that the unfolding Illinois story is very similar to the unfolding California story
By the time that State Farm’s October 2025 rate hearing rolls around the wildfire risk model adoption and the Illinois rate increase will help the Administrative Law Judge (an employee of the Department of Insurance) craft a narrative allowing him to rubber stamp State Farm’s rate increase request
Whining to Lara, Newsom and the public about how annoying it is to deal with insurance companies is pointless
Acting like Paul Revere and saying “the Redcoats are coming (to refuse to honor your homeowner insurance policy)” at least appeals to the self-interest of Palisadians and the public.
California Department of Insurance Completes Final Review of Wildfire Model
https://www.insurancejournal.com/news/west/2025/07/24/833155.htm
Mercury Insurance prepares to update homeowners’ insurance rates
https://www.insurancebusinessmag.com/us/news/property/mercury-insurance-prepares-to-update-homeowners-insurance-rates-544027.aspx
Clearly public servants don’t want their job and time to get recall petitions going. Newsom wasn’t because it was politics but now there is a reason. We need a guv and legislative that will eminent domain these insurance companies and replace their boards and ceo to settle claims then return control to stockholders! Most insurance got zillions in switzerland.
2 of 3 burned and insurance companies were booting me around before fire!
How dare billboard say that fireaid is hiring lawyers becuase of pressure from republican politicians (in the title of the article)Tragedy does not have a party and this is so insulted to everyone affected. Billboards writer Rachel scharf should be ashamed