State Farm has confirmed a payout of $2.45 billion for 12,200 claims linked to the January 2025 wildfires in Los Angeles, contributing to a total insurance payout that has surpassed $12 billion as of March 2025.

The California Department of Insurance reported that insurance companies have collectively paid out $12.1 billion for losses from the Eaton Fire and the Palisades Fire, which devastated thousands of homes.

Initial loss estimates from State Farm suggest direct losses could reach $7.6 billion, with retained losses expected to be around $212 million after reinsurance, according to AM Best.

The wildfires, which began on January 7, caused extensive property damage, prompting State Farm to mobilize its catastrophe response teams.

The Eaton Fire destroyed more than 9,400 structures, while the Palisades Fire resulted in the destruction of 6,937 structures, exacerbated by strong Santa Ana winds.

A total of 37,749 insurance claims have been filed, with 27,821 claims receiving partial payments to expedite recovery efforts.

In 2024, State Farm reported an underwriting loss of over $6 billion, a significant improvement from the $14 billion loss in 2023, influenced by various claims events.

As California's largest homeowners insurer, State Farm has faced over $5 billion in cumulative underwriting losses over the past nine years due to misaligned costs and risks.

In response to financial pressures from the wildfires, State Farm has requested a 22% rate increase for homeowners insurance, which California Insurance Commissioner Ricardo Lara has provisionally approved pending further justification.

Lara has also requested a $500 million capital injection from State Farm's parent company to support its California operations, along with a temporary freeze on policy nonrenewals and cancellations through the end of 2025.

If approved, the rate increases would take effect on June 1, 2025, and include additional hikes for renters, condominiums, and rental dwellings.

Early estimates indicated that insured losses could range from $8 billion for the Eaton and Palisades fires to as much as $40 billion for all five fires that impacted the area.