“I think every customer of State Farm that wants to know why they didn’t get paid, they can read these and see why,” attorney Reggie Whitten of the Whitten Burrage law firm told Oklahoma-based KFOR News. He argued the documents are “explosive” and illustrates the veracity of the group’s claims.
“State Farm is committed to meeting the needs of our policyholders in Oklahoma and we’re proud of our team’s work to help communities recover after disaster strikes,” a State Farm spokesperson told KFOR News, noting that the company has paid over $1 billion in severe weather-related insurance claims. “Efforts by trial lawyers to turn disputed allegations into broad, misleading, conclusions about State Farm’s claims practices creates confusion for customers, agents, and communities that depend on a strong and stable insurance market after severe weather.”
The ‘scheme’ at hand
In Oklahoma, insurance costs have skyrocketed with climate change partly to blame. As severe storms become more common, so does damage or destruction of homes. Oklahoma is now the sixth most expensive state to purchase home insurance.
According to the documents, State Farm employees pinpointed roof replacements as a source of savings with executive Nicole Manduca describing it as “the biggest bucket of opportunity” for them to shrink payouts.
Roof claims from wind and hail storms composed 57% of State Farm claims, according to a planning document titled the 2020 Fire Weather Leadership Business Plan. From there, State Farm employees crafted a playbook meant for adjusters to emphasize roof repairs instead of replacements. That included new training modules for insurance agents and additional sign-off on roof replacements.
It was first rolled out in Dallas County, Texas in June 2020, then the rest of Texas by December. State Farm pushed the tactics to all 50 states by the end of that year, according to the documents.
Last year, Oklahoma Attorney General Gentner Drummond opened a probe into State Farm’s handling of insurance claims in the state. The state alleged “a systematic breach of an insurer’s duty of good faith and fair dealing premised upon a planned, concerted, and coordinated reduction in the number of Oklahoma homeowners insurance claims approved.”
Oklahoma policyholders have said they believed State Farm attempted to profit at their expense and pull out of longstanding contracts.“It felt more like they were worried about their bottom dollar and saving money than taking care of their customers and doing what their contract said,” Oklahoma homeowner Tim Willard, who sued State Farm, told NPR in April.
What’s next in the State Farm case
Trials have been scheduled in November and December in a pair of cases related to the insurance claims. Some State Farm executives are expected to be deposed in the coming months.
Oklahoma’s insurance commissioner was sued earlier this month by a pair of homeowners waging their own legal battle against State Farm. The homeowner duo are pushing a judge to order commissioner Glen Mulready to publish a report into State Farm’s handling of roof claims that’s blown past deadlines.
Joseph Zeballos-Roig is a policy and politics journalist based in Washington D.C with a focus on economics. He is experienced in connecting the significance of events in the capital to the lives of everyday Americans whether its taxes, tariffs, interest rates or federal programs.
