Trump Demands State Farm Accountability After Wildfire Claims
President Trump attacked State Farm on social media this week, accusing the insurer of being “absolutely horrible” to January 2025 wildfire victims despite collecting large premiums. Trump directed EPA Administrator Lee Zeldin to compile lists of insurers that responded swiftly versus those that performed poorly, framing the issue as a matter of accountability. The post followed a February visit by Zeldin and Small Business Administrator Kelly Loeffler to Los Angeles, where they met with fire victims and local officials including Mayor Karen Bass and County Supervisor Kathryn Barger.
State Farm, California’s largest home insurer, has received 13,700 wildfire claims and paid out $5.7 billion, with expected total payments reaching $7 billion. The company is under investigation by Los Angeles County for how it handled claims, with fire survivors reporting delayed, denied, and underpaid compensation requests. Joy Chen, executive director of the Eaton Fire Survivor’s Network, has been sharply critical of State Farm’s practices and called for federal agencies including the Federal Trade Commission and Department of Justice to investigate industrywide claims practices that harm policyholders.
Trump’s intervention through what experts call the “bully pulpit” has limited practical effect under existing law. A 1945 federal statute, the McCarran-Ferguson Act, delegates insurance regulation primarily to individual states rather than federal authorities. Martin Grace, an insurance regulation expert at the University of Iowa, stated that while Trump can publicly pressure companies, Congress and the president would need to act together to fundamentally alter the regulatory system. The federal government has aided recovery through debris cleanup and approximately $3.2 billion in Small Business Administration loans approved as of February.
The American Property Casualty Insurance Association attributed delays to permitting challenges, noting Los Angeles approved permits three times faster than before the fire but that issuance continues to lag behind demand. Legal experts and fire victim advocates argue the federal government could establish programs such as a federal reinsurance initiative or expand catastrophe coverage similar to the National Flood Insurance Program to address what attorney Richard Giller called an “incredibly broken” catastrophe insurance market requiring “serious repair.”