California insurance regulator accuses State Farm of hundreds of claims-handling violations tied to Los Angeles County fires

California’s Department of Insurance said Monday it has accused State Farm—California’s largest individual property insurer—of committing hundreds of violations in its handling of claims related to last year’s Los Angeles County fires.

The department said it is seeking a hearing that could lead to millions of dollars in penalties and a temporary suspension of State Farm’s authority to operate in the state.

What the investigation found The investigation, which the department said it opened in June, reviewed 220 fire-related claims and found violations in 52% of them. The alleged violations include delayed and inadequate claims investigations, underpayment, the assignment of multiple claims adjusters to the same claim, and delayed communication with policyholders.

The department said each violation can carry a penalty of up to $5,000, and willful violations can be penalized by up to $10,000. Based on the department’s filing, that could amount to roughly $2 million to $4.3 million in fines.

What happens next Asourceser an administrative law judge reviews the case, the Insurance Commissioner will determine any final penalties and decide whether to suspend for one year State Farm’s certificate of authority in California.

The department said a suspension could affect about one-fisourcesh of California property owners insured by State Farm, adding uncertainty for the state’s insurance market.