SACRAMENTO, Calif. (AP) — California is seeking millions of dollars in penalties from State Farm after an investigation found the insurance company was slow to investigate and underpaid claims from the 2025 Los Angeles-area wildfires, regulators announced Monday.
State Farm violated the law hundreds of times in a sampling of 220 cases, Insurance Commissioner Ricardo Lara said. The maximum penalty amount allowed by law would be around $4 million if State Farm is found to be “willful” in violating state law. Regulators may also temporarily suspend the company's license, effectively prohibiting the state's largest home insurer from writing new policies for a year in California.
The two fires were devastating — they led to the deaths of 31 people and destroyed more than 16,000 structures.
State Farm said in a statement it rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims" and called the state's insurance market “dysfunctional.” The company said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.
“The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market," the statement said.
The legal action comes as California struggles with an ongoing insurance crisis, where companies are boosting rates, limiting coverage or pulling out completely from regions susceptible to wildfires and other natural disasters. In 2023, several major insurance companies, including State Farm, either paused or restricted new coverage in the state. They said they can’t truly price the risk on properties as wildfires become more common and destructive due to climate change.
The state now gives insurers more latitude to raise premiums in exchange for issuing more policies in high-risk areas. That includes regulations allowing insurers to consider climate change when setting their prices and allowing them to pass on the costs of reinsurance to California consumers.
Lara last year also approved State Farm's request to raise premiums by 17% for homeowners to help the company avoid a financial crisis after the LA fires. State Farm also agreed to not cancel any new polices this year in an agreement with the department and a consumer group in March.
Lara launched the investigation last June after survivors of the Palisades and Eaton fires said that State Farm was delaying and mishandling claims regarding damage to their homes and possible contamination from smoke.
“Our investigation found that State Farm delayed, underpaid, and buried policyholders in red tape at the worst moment of their lives. That is unacceptable, and we are taking decisive action to hold them accountable,” Lara said in a statement.
The department looked at 220 random claims filed to State Farm and found roughly 400 violations. They included underpayment and slow or inadequate claim processing. State Farm handled about one third of all residential claims filed after the fires, state officials said. The department said thousands of people might be affected by the unlawful behaviors.
In one case, State Farm waited nearly three months before starting to investigate a claim, according to the state. In another, the company delayed paying a customer for months while internally acknowledging the payment should have been approved. The company also caused confusion for a customer after assigning a dozen claim adjusters to the case within four months.
State Farm also illegally denied payments for hygienic testing for toxins in smoke damage claims, the legal filings said.
State Farm is the second insurer to face legal actions from the state over its handling of LA fire claims. The department is also seeking remedies against the FAIR Plan for denying smoke damage claims. The plan is an insurance pool that all the major private insurers pay into, and the plan then issues policies to people who can’t get private insurance because their properties are deemed too risky to insure.
FILE - The devastation from the Palisades Fire is shown in an aerial view of the Pacific Palisades neighborhood of Los Angeles, Monday, Jan. 27, 2025. (AP Photo/Jae C. Hong, File)
FILE - A tattered U.S. flag flaps in the wind over the remains of a mobile home park that was destroyed in the Palisades Fire along the Pacific Ocean, Dec. 5, 2025, in the Pacific Palisades neighborhood of Los Angeles. (AP Photo/Jae C. Hong, file)
A United Airlines jet came dangerously close to disaster Sunday when it hit a semitrailer truck and light pole on the New Jersey Turnpike as it came in to land at Newark Liberty International Airport.
“A major catastrophe was avoided by feet,” said safety expert Steve Arroyo, who landed on that same short runway many times during his career at United. “Had it been another five feet lower, eight feet, I mean, no more than 10 feet, that plane would have been all over the New Jersey Turnpike.”
The driver of the bakery delivery truck was treated at a hospital for minor injuries, and the Boeing 767 flying in from Venice, Italy, with 231 people aboard was able to land safely. No one on the plane was hurt. Air traffic control audio suggests the incident may have created a hole in the side of the plane, but the airline and the National Transportation Safety Board haven't confirmed that.
The NTSB said Monday afternoon that it has reclassified the incident as an accident because of the extent of the damage to the plane, but it didn't provide any details.
Anyone who drives that section of Interstate 95 near the airport is likely used to seeing planes coming in low and crossing over all the lanes of traffic as the planes get ready to land, but never this low.
Dash camera video from inside the truck shows the sound of the plane before part of it zooms into view out the driver's side window. The video also shows the moment of impact and appears to show the truck toppling onto its side. Typically, semitrucks are 13.5 feet (4.1 meters) tall, so the plane was quite low.
Chuck Paterakis, the vice president of the bakery company H&S Family of Bakeries, said the company is “relieved that everyone is safe, as that is our top priority.” The bakery is cooperating with investigators.
The pilots’ damage report wasn’t recorded because the crew opted to call the tower on the phone after landing instead of broadcasting the details over the radio.
But air traffic control audio posted by ATC.com revealed a discussion between an air traffic controller and a ground vehicle more than half an hour after the incident. “They felt something over the threshold and there's a hole in the side of the airplane,” the controller said.
Patrick Oyulu was among those on the turnpike when the plane struck the truck. He posted a short video showing the aftermath of the collision as the plane landed on the runway, just past the highway.
“Truck driver must have seen his life flash by,” Oyulu wrote in follow-up comments on his post on X, which has been viewed more than 65,000 times.
The New Jersey resident told The Associated Press on Monday that he had been in the passenger seat of a car heading southbound as the aircraft passed low overhead.
“The plane seemed to come in almost directly over the highway, and the truck driver appeared to react as if the aircraft was coming straight toward them,” Oyulu recounted in a direct message on X. “In that moment, the truck appeared to swerve sharply to the right, toward the roadside concrete barrier. It also looked as though the force of air from the aircraft may have affected the truck’s movement.”
Oyulu said he could also see smoke but wasn’t clear where it was coming from.
NTSB investigators arrived on scene on Monday to interview the flight crew and begin working to figure out how and why this happened. But the NTSB may not offer many details about what happened until it publishes its preliminary report roughly a month from now. The agency does not plan any news conferences on this accident.
Runway 29, where the plane landed, is the shortest runway at the airport at 6,726 feet (2,050 meters), and it is generally only used when there are strong winds like there were on Sunday afternoon. The other two Newark runways are 11,000 feet (3,353 meters) long. An air traffic controller told pilots at the time that the winds were gusting up to 31 mph (50 kph).
Arroyo said that investigators will definitely look at how well the United crew planned for the contingency that they would have to land on Runway 29 and exactly what data they had entered into their flight control system and navigational aids in the cockpit. He said those systems can help keep pilots on track in the glidepath before they have to take the controls and complete the landing visually.
“It’s one of the most challenging approaches in the world,” Arroyo said. “The margin of error is extremely low.”
Jeff Guzzetti, a former crash investigator for the NTSB and the Federal Aviation Administration, said he can't think of another accident when an airliner has struck a vehicle. It has happened with small planes before, but not airline jets. He said that investigators will likely also look at whether fatigue could have been a factor after the long flight from Italy.
The NTSB directed United to preserve the cockpit voice and flight data recorders for investigators to examine. The airline said the pilots have been put on leave while the accident is investigated.
Associated Press reporter Philip Marcelo contributed to this report from New York.
FILE - The New York City skyline is seen behind Newark Liberty International Airport in Newark, N.J., Wednesday, May 7, 2025. (AP Photo/Seth Wenig,File)
