Victims of the January 2025 wildfires unhappy with how insurers have handled their claims have filed lawsuits, protested and complained to local and state officials.
This week, they got support from an unexpected ally: President Trump.
“It was brought to my attention that the Insurance Companies, in particular, State Farm, have been absolutely horrible to people that have been paying them large Premiums for years, only to find that when tragedy struck, these horrendous Companies were not there to help!” Trump posted on Truth Social.
He also asked U.S. Environmental Protection Agency Administrator Lee Zeldin to give him a list of insurers that “acted swiftly, courageously, and bravely” to fulfill their legal obligation and another list of those that were “particularly bad.”
State Farm, California’s largest home insurer, is under investigation for how it has handled January 2025 wildfire claims. In a statement responding to the president’s post, it said it has received 13,700 claims, paid out $5.7 billion and expects total payments could reach $7 billion.
“Our leadership position in the California homeowners insurance marketplace means State Farm General Insurance Company — the State Farm company that provides homeowners insurance in California — insured more people impacted by this disaster than anyone else,” its statement read.
Tuesday’s post had its origins in a Feb. 4 visitthat Zeldin and Small Business Administrator Kelly Loeffler made to the Los Angeles area, where they met with L.A. Mayor Karen Bass, Los Angeles County Supervisor Kathryn Barger and Pacific Palisades fire victims, among others.
The visit was prompted by Trump’s criticism of the slow rebuilding process and by a Trump executive order allowing victims of the Los Angeles wildfires to rebuild without having to deal with “unnecessary, duplicative, or obstructive” permitting requirements.
At the time of the order, Bass dismissed it as a “meaningless political stunt,” saying the president has no authority over local permitting but could assist by speeding up Federal Emergency Management Agency funding.
The American Property Casualty Insurance Assn. industry trade group, in its response to Trump’s post, continued to point fingers at the government. It noted the fires were the third-worst natural disaster in American history in terms of insured losses, at $40 billion.
“Permitting can be a frustrating process, and it can always be improved,” it said in a statement. “Los Angeles has been approving permits three times faster than it was before the fire. However, permit issuance continues to lag.”
Barger, whose district includes the Eaton fire zone in and around Altadena, said this week that she defended the local permitting process to Zeldin. But said she also pointed out complaints about how insurers, and State Farm in particular, have handled claims.
“Many people feel that the insurance industry has let them down, and the number one company that we hear about is State Farm,” she said. “Obviously, Administrator Zeldin met with the president and outlined what I told him.”
Bass, who also spoke on the phone with Trump last month, issued a statement saying she “recently requested that the President intervene with the insurance companies to ensure they pay claims so that survivors can afford to rebuild.”
“I want to thank President Trump and EPA Administrator Zeldin for taking action and working alongside us to help survivors get the support they need and deserve,” she said.
A White House official said Friday that the EPA was working to produce the list of insurers “as quickly as possible for the president” and the “best way for insurance companies to help is to immediately pay out what they owe so victims can rebuild their lives.”
“Administrator Zeldin, on behalf of the president, is going to hold insurance companies accountable to the great people of California,” the official said.
The federal government has played a large role in the recovery, including leading the debris cleanup and, as of February, approving 12,600 Small Business Administration loans to fire victims totaling $3.2 billion.
However, a 1945 federal law, the McCarran-Ferguson Act, delegates authority to regulate the insurance industry primarily to individual states.
Joy Chen, executive director of Every Fire Survivor’s Network, which represents fire victims in the Eaton fire zone in Altadena and elsewhere, said her group believes the federal government has a larger role to play.
“President Trump has the opportunity to restore accountability to this broken system. Federal agencies have the tools to act,” said Chen, who has been sharply critical of State Farm’s claims practices and how California Insurance Commissioner Ricardo Lara has handled complaints against the company.
She specifically called for the Federal Trade Commission to examine “deceptive sales practices” that have left Americans underinsured and for the Department of Justice to investigate “industrywide claims practices that delay, deny or underpay payments owed to policyholders.”
Lara has defended his treatment of the company, noting regulators opened a probe of State Farm’s claims practices last year.
Martin Grace, a University of Iowa business professor and expert on insurance regulation, said that aside from the “bully pulpit” Trump exercised in his social media post, the federal government’s hands are largely tied.
“He can browbeat people, and Trump’s good at that. And I think the federal government, at one level, only has that. Now, Congress and the president together could say, ‘Listen, we don’t like what the states are allowing insurers to do, and we’re going to change the regulatory system,’” he said.
Grace noted that there was an insurance industry solvency crisis in the 1970s and 1980s that led to a 1990 Congressional report and federal pressure for improved state-level regulation, which was undertaken.
“Congress basically said, ‘Get your act together, or we’re going to take [regulation] back.’” And so the states got together and did a much better job on that,” he said.
Los Angeles attorney Richard Giller, who represents plaintiffs in lawsuits against insurers, said that the federal government could still take steps to improve the market.
Those might include establishing a federal reinsurance program that shares natural disaster risks with insurers, or covering the risk itself similarly to how the National Flood Insurance Program works.
“The catastrophe insurance industry in California is incredibly broken and needs some serious repair,” he said.
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