Los Angeles County launched a probe into Farmers Insurance Company’s handling of claims by policyholders impacted by last year’s devastating Eaton and Palisades wildfires, after a growing number of residents complained of delays, denials and underpayments.
In a letter sent to Farmers on Wednesday, the county’s lawyers said if the company is engaging in any unlawful or unfair business practices, it must immediately stop.
“Eaton Fire survivors did everything right—responsibly paying their premiums year after year—but when disaster hit, Farmers left them with a contaminated home and refused to pay for testing and cleanup,” said Los Angeles County Supervisor Kathryn Barger, who represents Altadena, in a statement.
“My constituents shouldn’t have to walk back into homes with lead and asbestos because an insurance company won’t pay for the test that would prove it’s there,” she added.
Farmers disputed the county’s claims.
“As always, we operate in accordance with applicable laws and regulations,” the insurer said in a Thursday statement. “We do not believe the inquiry accurately characterizes our actions or practices and will cooperate through the appropriate process.”
“Serving our customers during difficult times is at the heart of what we do, which is why each claim is reviewed individually, taking into account the specific circumstances of the loss and the coverage provided under the policy,” the company said. “We remain focused on handling claims with care, consistency and attention to each customer’s unique situation.”
County officials said that at a recent meeting with Eaton fire survivors, those with Farmers policies said the insurer had been slow or resistant to pay for toxin testing by qualified industrial hygienists, forcing residents to pay for it themselves.
The testing revealed that many homes were contaminated with unsafe levels of lead, asbestos, chromium, and other toxic substances, the county said.
The residents also told the county that Farmers has refused to pay for adequate remediation of the contaminants and declined to cover ongoing living expenses.
“After paying millions of dollars in premiums, policyholders deserve the benefits and support they paid for,” said Supervisor Lindsey Horvath, whose district includes Pacific Palisades. “Families whose homes survived the Palisades and Eaton Fires but remain damaged or contaminated should not be forced to choose between returning to an unsafe home and financial devastation.”
The new investigation comes after the county filed a lawsuit against State Farm on Aug. 31 for its handling of Eaton and Palisades fire claims. The county claims State Farm engaged in illegal and deceptive business practices that kept victims from receiving what they were entitled to under their policies. State Farm denied the county’s claims.