After widespread complaints over how the California FAIR Plan has handled January 2025 wildfire claims, Los Angeles County has opened a civil probe into the state’s home insurer of last resort to determine whether it has violated consumer protection laws.
The Office of the County Counsel is looking into a wide range of practices by the privately operated insurer, which has come under particular criticism over its handling of claims for smoke damage, which leaves homes standing but oftentimes uninhabitable due to toxic contamination.
The county is also investigating delays in responding to claims, whether the insurer has engaged in a practice of switching adjusters that burdened policyholders and whether it has failed to properly provide living expenses, among other issues, according to a letter sent to the FAIR Plan’s leadership.
It also demands the plan halt any illegal practices if they are ongoing.
“After having their lives devastated by the fires, Altadena residents should not be victimized yet again by their own insurance company,” said Los Angeles County Supervisor Kathryn Barger, who represents devastated Altadena neighborhoods, in a statement accompanying the announcement.
The county is empowered by statute to investigate and prosecute violations of the Unfair Competition Law on behalf of California residents and to seek restitution, civil penalties and injunctive relief for any violations.
In response to the investigation, a FAIR Plan spokesperson said the insurer is reviewing the county’s letter, while noting it has received roughly 5,400 claims from the Eaton and Palisades fires and paid nearly $3.5 billion to policyholders.
“The FAIR Plan evaluates each claim on its own merits, and pays all covered claims, including smoke damage claims, up to the individual policy limits, in compliance with all laws relating to property and casualty insurance claims handling,” said spokesperson Hilary McLean in an emailed statement.
This is the third insurer the county has targeted over its January 2025 claims handling.
It filed a lawsuit in August against California’s largest home insurer, State Farm General, for alleged violations of the state’s consumer protection law, and in September announced it was investigating Farmers Insurance over its handling of fire survivor claims. Both insurers have denied any wrongdoing.
The FAIR Plan — operated and financially backed by the state’s licensed home insurers — was established largely to provide coverage to property owners in urban neighborhoods unable to secure insurance in the commercial market. However, its enrollment has skyrocketed in recent years as regular carriers have pulled out of fire-prone neighborhoods.
A Los Angeles Times investigation published this year also found its policies have grown in neighborhoods where there isn’t substantial fire risk. The plan had nearly 700,000 residential policies in force as of June, a 157% increase since September 2022.
After the 2025 fires, there were complaints by residents that the Fair Plan refused to test and remediate homes suffering damage by smoke, which can leave behind lead, asbestos and other toxins. It was not the first time such criticism ensued after a wildfire, which has led to multiple lawsuits and a ruling that the plan’s smoke damage policy was illegal.
The Department of Angels, a fire victims group formed after the January 2025 blazes, applauded the county’s action.
“Survivors have been asking a simple question for nearly two years: Why are we still fighting for the insurance coverage we paid for? Eaton and Palisades fire survivors have waited long enough. We are grateful the County is listening — and hope it will now act with the urgency survivors deserve,” it said in a written statement.
The FAIR Plan was ordered by the state Department of Insurance in July 2025 to answer allegations that it handled smoke damage claims illegally. The department also sponsored Assembly Bill 1680, which was signed by the governor last month.
The Make it FAIR Act requires the plan to correct any deficiencies identified by department investigations, and subjects it to fines of up to $20,000 for violations of the law, among other provisions.
