Los Angeles County Is Taking On Three Insurers. Who Is Keeping Score?

THE NAVARRO REPORT - On October 8, Los Angeles County put a third insurer on notice. County Counsel told the California FAIR Plan to stop any unlawful or unfair practices in handling claims from the January 2025 Palisades and Eaton fires. The letter follows an August 31 lawsuit against State Farm and a September 9 investigation of Farmers. The cause is sympathetic. What is missing is a public scoreboard.

Start with the allegations. The State Farm suit, filed in Los Angeles Superior Court under California’s Unfair Competition Law, claims delayed and denied payouts, as many as 10 to 15 adjusters rotating through a single claim, withheld living expenses and inadequate evaluation of smoke damage. The county seeks restitution, penalties and injunctive relief. State Farm says its focus remains on helping customers, and the allegations are unproven.

The stakes are large. The fires killed 31 people and damaged or destroyed more than 16,200 structures. Insurers industry-wide received 41,800 claims and had paid $23.7 billion by early March. State Farm reports 13,700 claims and more than $6 billion paid, has closed 78 percent of them and expects total payments near $7 billion. It insures roughly 250,000 homes in the county. The FAIR Plan, the state’s insurer of last resort, reports about 5,400 claims and nearly $3.5 billion paid. Farmers has not published comparable figures in the coverage I reviewed.

Residents have reason to be frustrated. A July survey found 67 percent of FAIR Plan customers dissatisfied, the highest rate among the insurers surveyed. In Altadena and the Palisades, testing reportedly found lead, asbestos and chromium in homes still standing, and some owners paid for that testing themselves. Supervisor Kathryn Barger called Farmers’ stance “an unfair business practice that needs to end now.” County Counsel Dawyn Harrison noted that FAIR Plan customers have few other options.

The county is also not alone. The California Department of Insurance opened its own investigation of State Farm in June 2025 and later brought an enforcement action. Reports say it alleges violations in more than half of the claims it reviewed, over 400 in all, and seeks what would be the largest civil penalty after a wildfire this century. Two government actions aimed at one company raise an obvious question about duplication.

That is where the accountability gap sits. In the reporting I reviewed, I found no public figure for what the county’s investigations and litigation cost, no statement on whether outside counsel has been retained, and no estimate of what the county expects to recover. Nor did I find an explanation of how restitution would reach individual policyholders. The suit is a government enforcement action, not a class action, so the individual homeowners are not parties to it. Nor is it clear how the county’s case differs from the state’s. Each of those answers is feasible to publish. Without them, the public is asked to trust the strategy without seeing its price.

Supporters of the county’s approach make a fair case. Survivors cannot wait for Sacramento, and local government has a duty to act when a large share of its residents say they were treated unfairly. A county that investigates before it sues is also doing what the public asked. Litigation is slow, and the insurers dispute the claims. Farmers says it reviews each claim individually and follows the law, and the FAIR Plan says it pays covered claims up to policy limits. Their position deserves a hearing in court.

Fairness to the insurers, however, is a separate matter from fairness to taxpayers. Each new target adds legal work, and each lawsuit competes with other priorities in a county budget of roughly $54 billion. When penalties are won, the public should know in advance where the money goes. Without that information, residents cannot judge whether this strategy is the most effective use of their money, or whether it is simply the most visible one.

Three steps would close the gap, and each is modest. First, County Counsel should report to the Board of Supervisors each quarter on spending, staffing and any outside counsel on the insurer cases. Second, the county should define success in measurable terms: claims reopened, dollars restored to policyholders and time to resolution. Third, it should publish how its cases coordinate with the state’s, so that residents can see which effort is doing what. None of these steps requires new legislation or new money.

Holding insurers to their promises is a legitimate role for local government. Holding the county to the same standard is the other half of the job. Fire survivors have waited long enough for answers from their insurers. They should not also have to wait for answers about how their own government is spending money on their behalf.

(Jose E. Navarro, MBA, is a San Diego–based financial controller, public finance analyst and founder of The Navarro Report. With more than 20 years of experience in public finance, nonprofit management and government contract compliance, he writes about government spending, transparency and public accountability.)