Trump Orders Federal Probe Into State Farm Wildfire Payouts

President Donald Trump ordered a federal inquiry into the conduct of property insurance companies following the January 2025 Eaton and Palisades wildfires in Los Angeles County. Trump specifically singled out State Farm, describing the company and others as horrendous and absolutely horrible for failing policyholders who had paid large premiums for years. To facilitate the probe, Trump directed Environmental Protection Agency Administrator Lee Zeldin to compile a report identifying which insurers fulfilled their legal obligations and which were particularly bad.

This federal action follows a series of state and local legal challenges. California Insurance Commissioner Ricardo Lara launched a formal investigation into State Farm in June 2025 to examine troubling patterns in claims handling, such as inconsistent management and inadequate record-keeping. Additionally, Los Angeles County initiated an investigation on November 13, 2025, regarding potential violations of the Unfair Competition Law, with Board of Supervisors Chair Kathryn Barger stating that insurance delays were obstructing the rebuilding process.

State Farm defended its response, with CEO Jon Farney noting that the company insured more people impacted by the disaster than any other provider. The company reported issuing 5.7 billion dollars across 13,500 claims as of September 30, 2025, and expects total payments to reach 7 billion dollars. Meanwhile, Trump attributed the overall destructive impact of the fires and the slow pace of recovery to California leadership, including Governor Gavin Newsom and Mayor Karen Bass.