Insurance companies in California are facing mounting criticism over their handling of claims related to recent wildfires that ravaged the state, leaving many homeowners struggling to receive fair compensation for their losses. The situation has exposed deep flaws in the US insurance industry's ability to cope with climate-related disasters, highlighting issues such as inadequate communication, lowball estimates, and a focus on profits over people.
For Jessica and Matt Conkle, a midcentury ranch home loss due to wildfires exposed them to a frustrating and costly process. The couple initially received an emergency response from State Farm, but the claims process stalled, with multiple adjusters and delayed payouts causing significant stress. They claim that State Farm offered lowball estimates for their lost possessions, forcing them to negotiate repeatedly.
Similar struggles have been reported by fire survivors in other affected areas across Los Angeles County. A recent survey by the Department of Angels found that nearly eight out of 10 surveyed homeowners faced obstacles including multiple adjusters, lowball offers, fights over property lists, and poor communication.
The crisis is not just a local issue; it's part of a broader problem affecting the US insurance industry as a whole. Climate-driven natural disasters are becoming more common and severe, with catastrophic losses exceeding $100 billion in 2025 alone. Insurance companies are increasingly citing increased risks and costs as reasons to hike premiums, squeezing out all but the wealthiest homeowners.
Many providers have reduced coverage in high-risk areas or stopped writing new policies altogether, leaving consumers reliant on state-sponsored emergency insurance plans that offer inferior coverage. The Fair plan, California's last-resort option, has seen a surge in demand.
Insurance companies are also profiting handsomely from their investments in financial markets, which have been booming. The US industry generated record profits of $169 billion last year and is on track for another strong year in 2025.
Consumer advocates argue that the industry's lobbying grip on state regulators and lawmakers has led to a failure of leadership and enforcement. They point out that insurance companies are more concerned with their investment income than with providing fair coverage to customers.
The situation has sparked calls for reform, including increased regulation and greater transparency. Consumer advocates want regulators who will fight for consumers, not those captured by industry interests.
A major investigation into State Farm's handling of fire-related claims in Los Angeles County has been announced, with the county consumer protection division demanding a full documentary record from the company. The move may lead to payouts accelerating as the investigation progresses.
At the heart of the crisis is the need for a more equitable solution that spreads the risks associated with climate change more broadly. Experts argue that insurance companies should use their influence as institutional investors and divest from fossil-fuel companies, rather than profiting from them.
Homeowners like the Conkles also need stronger protections to ensure they have access to insurance in the first place and receive regular updates on rebuilding costs. The current system often leaves people under-insured, exacerbating the problem.
The outlook is grim, with experts predicting much higher prices and scaled-back coverage in high-risk areas. Some suggest state governments may step in to provide home insurance subsidies for lower-income families.
In this context, Chen's call for "illegal conduct" from insurance companies takes on a new meaning. The industry must do better, prioritizing people over profits at a time when communities are suffering.
For Jessica and Matt Conkle, a midcentury ranch home loss due to wildfires exposed them to a frustrating and costly process. The couple initially received an emergency response from State Farm, but the claims process stalled, with multiple adjusters and delayed payouts causing significant stress. They claim that State Farm offered lowball estimates for their lost possessions, forcing them to negotiate repeatedly.
Similar struggles have been reported by fire survivors in other affected areas across Los Angeles County. A recent survey by the Department of Angels found that nearly eight out of 10 surveyed homeowners faced obstacles including multiple adjusters, lowball offers, fights over property lists, and poor communication.
The crisis is not just a local issue; it's part of a broader problem affecting the US insurance industry as a whole. Climate-driven natural disasters are becoming more common and severe, with catastrophic losses exceeding $100 billion in 2025 alone. Insurance companies are increasingly citing increased risks and costs as reasons to hike premiums, squeezing out all but the wealthiest homeowners.
Many providers have reduced coverage in high-risk areas or stopped writing new policies altogether, leaving consumers reliant on state-sponsored emergency insurance plans that offer inferior coverage. The Fair plan, California's last-resort option, has seen a surge in demand.
Insurance companies are also profiting handsomely from their investments in financial markets, which have been booming. The US industry generated record profits of $169 billion last year and is on track for another strong year in 2025.
Consumer advocates argue that the industry's lobbying grip on state regulators and lawmakers has led to a failure of leadership and enforcement. They point out that insurance companies are more concerned with their investment income than with providing fair coverage to customers.
The situation has sparked calls for reform, including increased regulation and greater transparency. Consumer advocates want regulators who will fight for consumers, not those captured by industry interests.
A major investigation into State Farm's handling of fire-related claims in Los Angeles County has been announced, with the county consumer protection division demanding a full documentary record from the company. The move may lead to payouts accelerating as the investigation progresses.
At the heart of the crisis is the need for a more equitable solution that spreads the risks associated with climate change more broadly. Experts argue that insurance companies should use their influence as institutional investors and divest from fossil-fuel companies, rather than profiting from them.
Homeowners like the Conkles also need stronger protections to ensure they have access to insurance in the first place and receive regular updates on rebuilding costs. The current system often leaves people under-insured, exacerbating the problem.
The outlook is grim, with experts predicting much higher prices and scaled-back coverage in high-risk areas. Some suggest state governments may step in to provide home insurance subsidies for lower-income families.
In this context, Chen's call for "illegal conduct" from insurance companies takes on a new meaning. The industry must do better, prioritizing people over profits at a time when communities are suffering.
I cant believe how some insurance companies are treating their customers after wildfires. Like, I had to deal with my own parents trying to get help from State Farm last year and it was so frustrating! They got offered super low estimates for our damaged stuff and we had to fight to get the right amount. 
It's not fair that they're more worried about making money than helping people rebuild their lives.
Like, isn't that the opposite of what we're trying to do? 
I'm really surprised that state farm and other insurance companies aren't held accountable for their handling of wildfire claims in Cali 
. It's not just about the money they're making from investments, it's also about how they treat their customers when disaster strikes 
. The fact that they offer lowball estimates and stall payments is unacceptable. What's really going on here? Are these companies truly doing everything they can to help people recover or are they just trying to save face? 
I need some proof and stats on this before I can even consider siding with one party or the other.
with these insurance companies being super shady about paying claims... i mean, can you blame them for wanting to make some cash 
i just wish there was a way for homeowners like the Conkles to get some real support and not have to fight so hard for what's rightfully theirs 
... I mean, what's the point of having regulations if they're not going to be enforced? It feels like we're being left high and dry while the insurance industry makes bank 
. It's just not right that homeowners are going through this kinda stress because of something that's supposed to be there to help them, you know? Like, what happened to all that money they were making from investments and stuff? They could be using it to give people a fair shake instead of screwing over their own customers 
. We need some serious reform in this industry and I hope those regulators step up and do something about it 