State Farm Insurance Building in downtown Bloomington, Illinois.
An Oklahoma judge wants State Farm to submit documents pertaining to its internal underwriting and claims practices, after the carrier filed a motion for the court to reconsider the ruling.
On Friday Jan. 23, Judge Thad Balkman denied State Farm's motion to reconsider, clarify and stay the court's November discovery order stemming from a lawsuit filed by Cleveland County, Oklahoma residents Don and Brenda Foster. The legal action alleged State Farm improperly handled a homeowners' insurance claim following a 2021 hailstorm.
The lawsuit, filed by Marr Law Firm, Mansell & Engel and Glass & Tabor on behalf of the plaintiffs, states State Farm was following a company-wide practice of underpaying wind and hail claims, including their roof claim, by redefining covered damage to avoid full replacements.
After the court ordered State Farm to produce discovery, according to the attorneys, State Farm sought reconsideration, arguing the requests were irrelevant and unduly burdensome. At the same time, plaintiffs argue State Farm is recycling rejected arguments and relying on misleading, late-stage declarations rather than new evidence, and are asking the court to deny reconsideration and any stay.
"State Farm's nationwide scheme made simple: State Farm does not define what is and isn't considered damage in its policies, raises premiums as much as possible and if a state's insurance commissioner objects, threatens to leave the state," said lead plaintiffs' attorney Jeff Marr.
"It then manipulates its internal and secret definition of damage - a higher threshold means fewer indemnity payments to policyholders - and weaponizes its claims department with a new 'playbook' of tactics to attack payouts, branded as the 'Claim Quality Enhancement Plan' and hidden from regulators and policyholders," he added. "An engineer State Farm has conspired with before, HAAG Engineering, is used to retrain and calibrate claims staff. The result: State Farm enjoys its highest net worth yet of $145.2 billion, while its CEO receives $24.4 million."
Oklahoma has some of the highest home insurance premiums in the nation, averaging around $4,000 to $6,000 annually. The national average is around $1,820 per year. Costs have climbed dramatically in recent years. Since 2019, the state has seen a 50.8% jump in premiums.
"At State Farm, our priority is providing our customers with exceptional service," a State Farm spokesperson told PropertyCasualty360.com. "We handle each insurance claim with personalized care and a strong commitment to making sure customers receive all the benefits they're entitled to under their policy. We work hard to uphold the integrity of every insurance contract and are prepared to share the facts, and bring clarity and context to this matter in court."
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