For Marjan Rajabi, it started as a black cloud she could see from her backyard. Then it kept growing.
Soon the evacuation order came. Five days later, she was standing on the burned-out remains of her Pacific Palisades home of 23 years. From her single bag of possessions recovered from the fire, she held up a soot-covered lemon salvaged from a tree in her yard, and promised to rebuild.
“This is going to help us to be more united as a community, instead of being so individualistic,” she told the AP in a January 2025 interview.
Eighteen months later, she and many of her neighbors are indeed united. But they have not rebuilt. Instead, they have petitioned to intervene in the California Department of Insurance’s ongoing investigation of State Farm, seeking tougher penalties for the carrier’s handling of wildfire claims.
Residents accuse insurers of slow response
The group’s petition comes as the California Department of Insurance last month announced an investigation of State Farm. Of nearly 39,500 claims filed as a result of the devastating Eaton and Palisdes fires, over 11,300—one-third—are to the insurance giant.
A state investigation of 220 State Farm claims found a total of 398 violations, including slow investigations, underpayment of claims, confusion, denials, and poor communications. The investigation could result in up to $2 million in fines and State Farm’s license suspended for up to a year in the state.
“We are taking decisive action to hold them accountable,” Commissioner Ricardo Lara said.
Rajabi is one of those customers. She said at a press conference Thursday that the series of calls and meetings with seven different State Farm adjusters since the incident has felt like a “second trauma.”
Now she has one approval to go before she can rebuild her home, but only 65% of her insurance payout, leaving her to pay for the initial work before the company pays out the rest.
“I’m asking to please make us whole so we can rebuild our lives,” she said. “We just want to get back home.”
She’s one of scores of residents taking the insurer to task for its response to the claims. They’ve banded together as a group called the Every Fire Survivors Network to take insurance companies to task for their slowness to respond to the wildfires.
Pickleball club spawns survivor network
The Every Fire Survivors Network started as an Altadena country club pickleball players’ group chat on WhatsApp. Amid, and after, the fires, it became a crucial source for sharing emergency information with neighbors.
It says now it has 1,600 claims of misconduct, alleging a pattern of delays, denials, and underpayments, said Joy Chen, a former L.A. deputy mayor who’s the group’s executive director. State Farm, which insured many Eaton and Palisades fire survivors, has been in its crosshairs for much of the last year.
Chen and the group loudly criticized State Farm when the insurer announced rate hikes in the wake of the fires last year. State Farm later said some of those customers could see refunds.
“When the largest player in the market systemically does not fulfill its contract, that has a depressing effect on the entire market,” Chen said. She accused the insurer of “holding back the entire Los Angeles recovery.”
In a petition filed with the insurance commissioner, the group seeks party status in the investigation. If they attain it, they would have a say in whatever settlement State Farm reaches in the matter.
The survivors want a more systematic review of State Farm claims, more payouts, and a larger penalty for State Farm, said Michelle Meyers, a partner with law firm Singleton Schreiber LLP who is representing the group.
But they also want systemic change, alleging insurers have slow-rolled payouts consistently in five other major disasters in the state since 2017.
State Farm says focus remains on helping survivors
State Farm has denied California’s allegations and called the state’s insurance market “dysfunctional.” Its challenges in the wildfires reflect the increasing difficulty insurers have doing business in an era when unfathomably expensive disasters become the norm.
The Palisades and Altadena fires in January 2025 destroyed 16,000 structures, including 12,000 homes, causing upward of $131 billion in property and capital losses.
In a statement to Realtor.com®, State Farm said it has already paid $5.9 billion in claims for Eaton and Palisades fire survivors and “remains committed to supporting customers as they rebuild and recover.”
The insurer previously announced new steps to help California policyholders, like assigning them single points of contact and increasing communication.
“We recognize that many wildfire survivors, including those that are State Farm General policyholders, continue to face difficult recovery challenges. Our focus remains on helping customers recover.”
California information shows insurers have paid about $23.7 billion to residential, commercial, and auto policyholders. The California Department of Insurance has received $280 million from insurers through direct intervention.
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