AG Drummond launches new lawsuit against State Farm

OKLAHOMA CITY (KFOR) – Oklahoma Attorney General Gentner Drummond on Wednesday filed a new lawsuit against State Farm Fire and Casualty Company, alleging the insurer is engaging in a scheme to deny and underpay hail and wind damage claims by Oklahoma homeowners.

According to Drummond's office, State Farm is alleged to have engaged in a pattern of deceptive and fraudulent conduct that harmed policyholders throughout Oklahoma by using undisclosed claims-handling practices, restrictive internal standards, and outcome-oriented engineering reviews to reduce claim payments and increase corporate profits."

"This case is about more than individual claim disputes," Drummond said. "The allegations describe a corporate scheme that threatens the integrity of Oklahoma's insurance marketplace and undermines public confidence in an industry families rely on when disaster strikes. My office will continue fighting to ensure Oklahoma consumers receive the benefits they paid for and the fair treatment they deserve."

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The petition filed in the Cleveland County District Court cites that State Farm implemented an internal program known as the "Hail Focus Initiative," reducing roof replacement approvals and minimizing claim payments to policyholders across Oklahoma.

The lawsuit additionally addresses State Farm's marketed homeowners' policies as providing replacement-cost coverage for storm-related damage while allegedly using undisclosed internal standards to limit coverage and deny valid claims, Drummond said.

"It is unacceptable that Oklahomans are paying rising homeowners insurance premiums yet receiving less protection in return," Drummond said. "Inflation and weather do not explain, let alone justify, the widening gap between what Oklahomans pay and what they receive. This new action will prevent State Farm from continuing to delay the matter with procedural posturing."

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Drummond's office says the State is seeking injunctive relief, civil penalties, disgorgement of profits, restitution, and other relief authorized by law.

A State Farm Spokesperson responded to Ag's lawsuit to KFOR, saying, "We are pleased with the Oklahoma Supreme Court's unanimous decision on this matter. The Attorney General's lawsuit does not change the facts. State Farm remains committed to helping customers recover after storms, providing access to insurance, and working constructively with the regulator to benefit Oklahoma consumers. Over the past two years, State Farm has paid more than $1 billion to Oklahoma customers for wind and hail damage to their homes and property. We fairly and diligently evaluate every claim and pay what we owe under the policy based on the facts and coverage purchased. Unfortunately, the continued focus on these allegations appears driven more by political motivations than by the facts or the needs of Oklahoma consumers."

Read the petition.