California regulators are pursuing millions of dollars in penalties against State Farm after an investigation found the insurer repeatedly delayed and underpaid claims stemming from the 2025 Los Angeles-area wildfires, which killed 31 people and destroyed more than 16,000 structures. State insurance commissioner Ricardo Lara said an audit of 220 randomly selected cases uncovered roughly 400 violations, including months-long delays in beginning investigations, improper denial of smoke-damage testing payments, and chronic underpayments — and authorities may also temporarily suspend State Farm's licence, barring California's largest home insurer from writing new policies for up to a year. State Farm rejected the allegations, saying it has paid out more than $5.7bn on nearly 14,000 fire-related claims and calling the threatened suspension a "reckless, politically motivated attack," as the state already grapples with a broader insurance crisis that has prompted major insurers to limit or withdraw coverage across wildfire-prone regions.