Oklahoma AG Joins Lawsuit Against State Farm Over Alleged Storm Damage Claim Denials

Oklahoma's Attorney General Gentner Drummond has intervened in a class-action lawsuit against State Farm Fire and Casualty Company, alleging the insurer unfairly denied homeowners' storm damage claims. The lawsuit centers on State Farm's so-called "Hail Focus Initiative," an internal program purportedly designed to restrict approvals for roof replacements and narrowly define hail damage, attributing it instead to other causes such as wear and tear or installation errors. Attorney General Drummond's joining of the suit strengthens the case by enabling a formal investigation into possible illegal enterprise conduct by the insurer. The lawsuits, numbering around 200 cases, claim that State Farm's practices have led to underpayment or denial of legitimate hail damage claims, even as homeowners face rising insurance premiums. One cited example involves a Tulsa-area home where a substantial storm caused damage that was reportedly overlooked or minimized by a delayed adjuster inspection. State Farm denies these allegations and maintains each claim is evaluated individually. Insurance rates in Oklahoma are among the highest nationwide, with a documented 50.8% increase since 2019, significantly outpacing the national average. This rise has sparked scrutiny over whether factors other than inflation and weather, such as insurer practices or regulatory enforcement gaps, are contributing to escalating costs. Drummond argues that the market lacks fair competition and claims regulatory bodies, including the Oklahoma Insurance Department, have inadequately enforced protections against unfair practices. The Attorney General seeks to hold State Farm accountable under several statutes, including the Oklahoma Consumer Protection Act, anti-racketeering laws, and deceptive trade practices legislation, also alleging civil conspiracy and unjust enrichment. He emphasizes consumer protection as a state responsibility, aiming to ensure homeowners receive fair value for their insurance premiums. State Farm has resisted discovery efforts by filing motions to block depositions of its employees and executives. Oklahoma Insurance Commissioner Glen Mulready disputes the criticism, asserting the state's homeowners insurance market is competitive. However, Mulready has expressed willingness to collaborate with Drummond's office to examine the industry's regulatory landscape. This developing case highlights significant concerns about insurance claims handling, regulatory oversight, and market competition within Oklahoma's homeowners insurance sector. It may set a precedent for how insurers' claim adjudication practices are scrutinized amid rising premiums and increasing severe weather events driving claims nationwide.