The insurance company canceled thousands of California homeowners' insurance policies last year in an attempt to avoid "financial failure."

State authorities previously listed the Palisades as one of the five Southern California areas with the highest concentration of potential wildfire risks. The community also is among the areas most impacted by an unavailability of insurance coverage.

State Farm is being accused of canceling thousands of fire insurance policies in California right before the massive wildfires. More than 10,000 homes and businesses have been destroyed as multiple wildfires continue to ravage parts of Los Angeles County,

The massive fires that have destroyed much of Pacific Palisades and demolished more than 2,000 homes in Los Angeles County threaten an effort to fix California's troubled home insurance market.

State Farm has dropped around 1,600 policies in Pacific Palisades, where the Palisades Fire has devastated the area. Homeowners in Pacific Palisades have increasingly relied on the FAIR Plan for fire insurance,