Attorneys reveal more about sealed documents in insurance scheme lawsuits

OKLAHOMA CITY (KFOR) — More is being revealed about the thousands of lawsuits against State Farm and Allstate, alleging both insurance companies profited off of policyholders through underpaying and denying claims.

JC Hallman, an investigative reporter with Oklahoma Watch, broke the initial story about State Farm hearings that would eventually lead to the current legal battle over secret documents and now action from the State Attorney General's Office.

"The backstory of that goes really deep. It goes decades back, and the truth is, is that it's not and never was just State Farm; long before this started to happen with State Farm, Allstate was more or less doing the same thing," Hallman explained.

"For a long time, all we were able to say was what was being said in court and, and what was in the petitions," Hallman said.

Oklahoma County judge sets trial date for Hursh v. State Farm

Now attorneys with Whitten Burrage and the Marr Law Firm are revealing more about the cases and the documents the insurance companies have previously been able to keep confidential.

In an earlier case against Allstate, attorneys with the Marr Law Firm, Ashton Poarch and Nick Marr, were able to reveal a practice dating back to 1997, called the Claim Core Process Redesign, that the company used when assessing wind and hail damage claims.

"They were paying roofs, you know, 70-some odd percent of the time after the fact. They started with tests in Albuquerque, Denver, and Dallas, and they found, with what they called winning results, a diminishment of about 50%, and then they rolled it out nationwide, and it dropped from there. That was in the early 2000's and they're continuing those practices now," Poarch said.

"When you look at those documents, they literally say, wow, great, and winning. That's how explicit they are about what they consider to be success despite what a policyholder actually receives," Marr said.

Hannah Whitten, an attorney with Whitten Burrage, is also fighting to de-designate documents that have been sealed for the duration of these lawsuits,

"State Farm's managers are telling their adjusters to deny claims. That's what the scheme is about. That's why these tactics are developed, and that's what we intend to prove at trial," Whitten said. "There are documents produced by State Farm where they're doing these internal metrics on savings, and State Farm estimated that on average, every homeowner that they underpay or flat-out deny, like Billy Hursh or like Neil and Lacy West, each one of those homeowners, State Farm saves $15,000," Whitten said.

Last week a Comanche County district judge granted Whitten's request to depose the CEO of State Farm.

"We look forward to having him under oath to testify honestly as to what these documents mean, and I am interested to see how he defends these tactics that absolutely have reduced coverage across the state," Whitten said.

Whitten says there's a possibility that the same judge may unseal some of the documents and they could become available as early as this week.

State Farm responded to the claims against their company in a statement.

"Our homeowners policy is designed to provide some of the broadest insurance coverage available. Over the past two years alone, State Farm has paid more than $1 billion to Oklahoma customers for wind and hail damage to their homes and property.

State Farm strongly disagrees with broad claims that mischaracterize how we serve customers or evaluate covered damage. These are allegations in pending litigation, not findings of fact.

Oklahomans deserve a clear distinction between allegations, legal arguments, and proven facts. Wind and hail claims can involve complex questions about cause of loss, policy terms, deductibles, prior wear, repairability, documentation and applicable law.

When coverage applies, State Farm pays. When coverage does not apply, we explain why and remain willing to review additional information. Turning disputed litigation claims into a broad public narrative creates confusion for customers, agents and communities that depend on a strong insurance market after severe weather."

Gina Morss-Fischer, State Farm Representative

Allstate also responded to the claims.

"Allstate is committed to supporting customers with timely and fair claim payments based on their policy to help them recover from storms."

Davis Roberts, Allstate Representative

Not only are the attorneys going head to head with the insurance companies in civil cases, but they've also been retained by the AG's office to help in his filings against State Farm and Allstate.

"The RICO component of the attorney general's lawsuit allows us to investigate Allstate's relationships with all these supposedly objective third parties, when in reality, as we've seen and as even the U.S. Senate saw, there's nothing unbiased about these people. They're there to give Allstate the opinion that they want," Marr said.

"This idea that these insurance companies are doing these different little schemes, they're not; they're all the same schemes. They're with the same players; they're with the same vendors. That's why they're so similar," Poarch said.