Los Angeles County has launched an investigation into how the California FAIR Plan Association handled insurance claims from residents impacted by the January 2025 Eaton and Palisades fires, county officials announced. The probe centers on potential violations of California's Unfair Competition Law, and it makes the FAIR Plan the third insurer the county has turned its attention to since the fires tore through Altadena, Pasadena, Pacific Palisades and Malibu.
According to Los Angeles County, residents have complained about delays, underpayments and outright denials of wildfire claims, along with FAIR Plan refusals to pay for testing and remediation of toxic contamination in their homes. County Counsel has notified the FAIR Plan that any unlawful or unfair business practices must stop immediately and that the association must comply with state law. As reported by MyNewsLA.com, the FAIR Plan is a private association made up of all insurers licensed to write property coverage in California — it is not a state agency, and it is funded primarily through the policies it sells rather than by public money.
A Last Resort Insurer Under Fire
The FAIR Plan exists as an insurer of last resort, built to serve homeowners who cannot find coverage in the traditional market — a role that has made it a lifeline for many Altadena and Palisades households after the January 2025 fires. Supervisor Kathryn Barger, who represents Altadena and Pasadena, said Altadena residents should not be victimized again by their insurance company. “It is inexcusable that people are struggling to get relief and recovery help when they need it most,” Barger said, per the same county announcement.
Supervisor Lindsey P. Horvath, who represents Pacific Palisades and the city of Malibu, said the FAIR Plan is the third insurer Los Angeles County is investigating over its treatment of fire survivors. “Fire survivors who paid their premiums deserve fair and timely compensation, not delays or denials,” Horvath said, adding that the county intends to protect survivors and hold accountable those who fail them.
Survey Findings Point to Widespread Frustration
A survey conducted by Embold Research polled 2,023 adults in Altadena, Pacific Palisades, Pasadena and Malibu between June 3 and June 15, 2026, and found that FAIR Plan customers reported receiving lowball estimates, poor communication, conflicting or inaccurate information, and outright claims denials. More than half of respondents said they had multiple adjusters assigned to their claims over the course of the process. A separate survey report released by the Department of Angels in July 2026 found that 67 percent of surveyed FAIR Plan customers were dissatisfied with their claims experience.
County Counsel Dawyn Harrison said her office is committed to thoroughly investigating the FAIR Plan's actions and ensuring fair treatment for claimants. “FAIR Plan homeowners are especially vulnerable because their insurance options are severely limited,” Harrison said. Under the Unfair Competition Law, county counsel is empowered to investigate and prosecute violations on behalf of the people of California, and the office may seek restitution, civil penalties and injunctive relief if violations are found, according to California's Unfair Competition Law.
Part of a Broader Pattern of County Action
The FAIR Plan investigation follows a lawsuit Los Angeles County filed against State Farm on August 31, 2026, alleging unfair business practices and other legal violations in how the insurer handled claims from Eaton and Palisades fire survivors, according to Supervisor Lindsey P. Horvath's office. The county also announced on September 9, 2026, that it was investigating Farmers Insurance over its handling of fire survivor claims tied to the same two fires. That Farmers inquiry likewise focuses on potential Unfair Competition Law violations, and policyholders reportedly complained of delays, refusals to pay for testing and remediation of lead and other contamination, underpayments, and denials of legitimate wildfire claims, as reported by CBS News Los Angeles.
The FAIR Plan has grown enormously as traditional insurers have pulled back from wildfire-prone areas. As of June 2026, the FAIR Plan had 696,562 dwelling and commercial policies in force and $768 billion in total exposure, according to data published by the California FAIR Plan. That exposure figure reflects an 11 percent increase since September 2025 and a 250 percent jump since September 2022, while total written premium reached $2.04 billion, up 212 percent over the same four-year span.
A History of Legal Scrutiny Over Smoke Damage
The FAIR Plan has already faced legal setbacks tied to its wildfire claims practices. A Los Angeles County Superior Court judge ruled that the FAIR Plan's smoke-damage policy violated the state Insurance Code by offering less coverage than state law requires, according to LAist. That ruling struck down requirements that fire damage involve permanent physical changes and that smoke damage be visible rather than proven through laboratory testing. The FAIR Plan said afterward that it was reviewing the decision but did not expect to appeal, per the same report.
The association's rapid growth has outpaced its roots as a narrow backstop. The FAIR Plan was created in 1968 as an insurance market of last resort for Californians unable to obtain traditional coverage, functioning as a syndicated pool of insurers licensed to do property and casualty business in the state, according to a legal analysis from Lathrop GPM tied to a separate lawsuit in which ten California homeowners sued the FAIR Plan Association and several member insurers over alleged failures to investigate and pay wildfire-loss claims. By March, the FAIR Plan's residential enrollment had reached 556,000, up from fewer than 250,000 California homeowners in 2021, according to the Los Angeles Times.
