LETTER: to Ricardo Lara Re: State Farm Insurance

(Editor’s Note: the following letter, dated August 1 was printed in Pasadena Now and is reprinted with permission.)

People who are insured are not being paid after the Palisades/Eaton Fires and have asked Insurance Commissioner Ricardo Lara to respond.

Insurance Commissioner Ricardo Lara

300 Capitol Mall,

Suite 1700 Sacramento, CA 95814

Email: commissionerlara@insurance.ca.gov; michael.soller@insurance.ca.gov

Dear Commissioner Lara,

I write on behalf of the Eaton and Palisades fire survivors to express grave concern about your proposal to bifurcate the State Farm rate proceeding (PA-2024-00011, 12, and 13). Your action would fast-track a billion-dollar rate hike while indefinitely postponing—or altogether avoiding—any scrutiny of State Farm’s misconduct.

This isn’t bureaucratic nuance. It’s regulatory failure with life-altering consequences. Our families paid our premiums year after year. We played by the rules. We lost our homes. And now, the agency created to protect Californians is shielding the insurer doing the greatest harm.

As one L.A. survivor put it: “My mom has lost 20 pounds, she can’t sleep, and her hair is falling out. Not because of the fire—but because of State Farm’s bad faith.”

State Farm Violations

You’ve publicly admitted receiving more complaints about State Farm than any other private insurer. We’ve collected nearly 500 firsthand survivor accounts documenting systemic violations of California law:

You can read the full package here: click here.

These aren’t isolated incidents. They show a pattern of unlawful conduct. And your proposal would enable more of them.

CDI’s Unfinished Oversight

On June 12, you announced a Market Conduct Exam of State Farm, stating, “Californians deserve fair and comprehensive treatment from their insurance companies.” You said it could take months. Yet now, without even releasing preliminary findings, you propose to sever enforcement from rate review.

Your bifurcation proposal is a violation of the public trust. The principle is simple: If a company breaks the law, it should face sanctions, not be rewarded with a billion-dollar rate hike.

This is regulatory capture in action: when a government agency created to regulate an industry ends up doing its bidding. The result: weakened rules, lack of enforcement, and massive harm to the public.

The Cost of Regulatory Capture

A new report by the Department of Angels finds that a stunning 70% of insured Eaton and Palisades fire survivors are experiencing delays, denials, and underpayments that are derailing their recovery. Among those insured by State Farm, the figure is 82%.

The financial gap between what families are owed and what insurers are paying is often hundreds of thousands of dollars. Billions in legally obligated insurance payouts remain unpaid. FEMA can’t bridge that. Philanthropy shouldn’t be asked to.

The failure of the insurance system under your watch is now impeding the entire Los Angeles recovery.

Required Actions

As former Commissioner John Garamendi stated: “The Insurance Commissioner has clear authority to compel insurers to pay claims fully and promptly—and to block any rate hikes until survivors are made whole.”

You alone control the scope and timeline of your exam. You alone control the scope and timeline of your rate decision. We therefore urge you to:

1. Withdraw your bifurcation proposal
2. Complete and publish your Market Conduct Exam
3. Freeze all rate actions until State Farm brings its handling of Eaton and Palisades claims into full compliance with: • 10 CCR § 2695.7 – Fair Claims Settlement Standards • Insurance Code § 790.03 – Unfair and Deceptive Insurance Practices

A Coalition for Accountability

For months, survivors and advocates have pleaded with you to hold insurers accountable. On July 7, six months after the fires, more than 400 survivors and allies wrote over 1,500 postcards and spoke to you directly. If you haven’t seen our remarks, they’re here: click here.

More than 20,000 Americans have joined our call: No rate hike until State Farm pays us what it owes.

We never asked for this fight. We don’t have billion-dollar ad budgets or armies of lobbyists. All we have is each other, and a rapidly growing coalition of Americans united by a simple truth:

We kept our promises. Now we ask you to keep yours.

Because when insurers break the law, and regulators enable them, this isn’t just about money. It’s about whether our families ever get to come home.

Sincerely, Joy Chen Co-Founder and CEO Eaton Fire Survivors Network

Cc: Administrative Law Judge Karl Fredrick J. Seligman; Senator Sasha Perez; Senator Ben Allen; L.A. County Supervisors Board Chair Kathryn Barger; L.A. Mayor Karen Bass

Chen added the almost 500 complaints in her letter and concluded with one person writing:  My story is the same as most other people. My home and entire neighborhood in the Pacific Palisades burned to the ground on January 7. I have received 10% of my contents coverage. and now am spending months compiling 100,000+ items in a spreadsheet in order to get 100% payout on contents coverage (reliving the trauma daily).

All of my other policies, automobiles, etc. paid out the full limits with no difficulties. some other carriers like Hagerty Auto even paid out the full limit before I was allowed to go see my property and weeks before my first of three state farm adjusters would even return my calls after proper notice that I would have a material claim…. Now SF is offering an estimate to rebuild my house that is less than it cost to build the home in 2004.

It was a custom home with a lot of custom finishes and significant renovations that were done within the last few years. State Farm declined to meet with me to discuss all the details of our home construction and finishes. And they have not provided me any support to substantiate their lowball number. It is odd that they know the number down to the last penny but say that the rebuild estimate report is not ready. And so, they cannot share it with me.

Now the burden is on me to prove that my home will cost market pricing to rebuild. All of my neighbors with State Farm in the Palisades are in the same boat. Delay, deny, distract…that is State Farm’s modus operandi. They are not a good neighbor. Rather they are acting in bad faith. I have filed a complaint with the CA insurance department. But I have not heard anything in response yet after several weeks. Hopefully this coordinated effort will inspire State Farm to do what they are contractually obligated to do for their policy holders…Payout bona fide claims in a timely fashion and without unreasonable and unnecessary hardship and delays.