Los Angeles County opened a formal investigation into Farmers Insurance on Wednesday, Sept. 9. The county alleges the insurer delayed, denied and underpaid claims filed by survivors of the January 2025 Eaton and Palisades fires.

The probe, led by the County Counsel's office, focuses on potential violations of California's Unfair Competition Law (UCL). It is the county's second enforcement action against a major insurer in two weeks, following an Aug. 31 lawsuit against State Farm over similar allegations.

At the center of the complaints against Farmers: contamination testing. At a recent meeting with Eaton Fire survivors, policyholders told county officials that Farmers has been slow, resistant or has outright refused to pay for qualified industrial hygienists to test standing homes for toxins, Spectrum News reported. Residents said they were forced to pay for testing out of pocket.

That testing revealed unsafe levels of lead, asbestos, chromium and other toxic substances in homes that survived the fires, according to the county.

Community group Eaton Fire Residents United collected test results from hundreds of homes and found roughly 96% tested positive for lead, the Daily News reported on May 31. A third of those homes remained uninhabitable even after cleanup.

"My constituents shouldn't have to walk back into homes with lead and asbestos because an insurance company won't pay for the test that would prove it's there," Los Angeles County Supervisor Kathryn Barger said. "We are going to hold Farmers accountable to the law, and if they've broken it, they will answer for it."

Supervisor Lindsey Horvath said families whose homes survived the fires should not be forced to choose between returning to an unsafe home and financial ruin. She said Farmers has had more than enough time to do right by its customers.

County Counsel Dawyn Harrison said the office is committed to a thorough investigation and that claims need to be resolved quickly and in full compliance with the law, the Daily News reported.

Farmers Insurance spokesperson Carly Kraft said in an email that the company operates in accordance with applicable laws and does not believe the inquiry accurately characterizes its actions or practices. The company said it would cooperate through the appropriate process.

The county notified Farmers that if it is engaging in unlawful or unfair business practices, it must stop and come into full compliance with state law. Under the UCL, the county can seek restitution, civil penalties and injunctive relief.

The Farmers probe adds to mounting legal pressure on the insurer. In February, Altadena homeowners filed a proposed class-action lawsuit in Los Angeles Superior Court accusing Farmers and its approved vendor, Hygiene Technologies International, of using substandard environmental assessments to systematically deny smoke and soot remediation claims, Hoodline reported.

The twin fires ignited on Jan. 7, 2025, killed 31 people and destroyed more than 16,000 structures across Los Angeles County. As of March, nearly $24 billion in related claims had been paid out, but more than 13,000 smoke-damage claims remained unresolved.

Residents seeking information on the county's enforcement actions can visit the County Counsel's website.