Oklahoma homeowners say State Farm ran a secret plan to deny roof claims

Hundreds sue over denied hail damage

Billy and Lacy Hursh of Broken Arrow, Oklahoma, watched hail pound their roof in October 2023. Two independent contractors said the whole roof needed replacing.

State Farm called the damage “minor” and said it fell under the deductible. Eight months later, another major hailstorm hit.

The couple borrowed against their home equity and paid about $22,000 out of pocket for a new roof. Their lawsuit has since grown into one of the largest insurance fights in Oklahoma history.

Lawsuit claims program aimed to slash payouts

The Hursh lawsuit says State Farm created an internal program called the “Hail Focus Initiative” in 2020. Court filings claim the goal was to cut hail claims costs by half.

The program allegedly tightened what counts as hail damage, using standards that never appeared in policyholders’ contracts.

Adjusters allegedly learned to reclassify real hail damage as normal wear and tear or cosmetic issues.

State Farm also allegedly brought in consulting firm Accenture and forensic assessor Haag Engineering to reshape how it evaluated damage.

Program allegedly started in Texas first

Court filings say the initiative launched in Dallas County, Texas, in June 2020. State Farm then expanded it to three other states with frequent hailstorms, including Oklahoma.

Within six months, the company rolled it out across the rest of the country.

Homeowners who suffered tens of thousands of dollars in roof damage found their claims denied or lowballed, filings allege. The pattern, according to the lawsuits, was consistent across state lines.

More than 600 Oklahomans have filed suit

Law firms told NBC News that more than 600 Oklahoma homeowners have similar lawsuits pending against State Farm. Oklahoma City firm Whitten Burrage represents about 200 cases.

The Jeff Marr Law Firm handles roughly 155 in-state, plus more out of state. Those numbers keep growing.

In one case, State Farm allegedly offered about $4,400 on a claim where an independent contractor estimated roughly $31,000 in damages. That gap tells the story for many of these homeowners.

An internal email raised red flags

Court filings include a 2023 internal email from an Oklahoma City State Farm agent to company managers.

The agent asked how he should explain to clients that hail damage visible in contractor photos was being called invisible by claims staff.

The email suggested the agent understood that denying hail claims had become a pattern at the company. There are about 300 State Farm captive agents in Oklahoma.

None responded to requests for comment from Oklahoma Watch.

Attorney general steps into the case

Oklahoma Attorney General Gentner Drummond filed a motion to intervene in the Hursh case on Dec. 4, 2025.

His petition accuses State Farm of violating the Oklahoma Consumer Protection Act, the state’s anti-racketeering law, and the Deceptive Trade Practices Act.

Drummond says State Farm marketed policies as full replacement-cost coverage while secretly setting claim outcomes to meet savings targets. He wants penalties, damages, structural reforms, and recovery of profits.

Oklahoma County District Judge Amy Palumbo granted full intervention on Dec. 30, 2025.

State Farm says it did nothing wrong

State Farm denies any wrongdoing. The company calls the initiative an effort it started in 2020 to improve accuracy, quality, and consistency in handling wind and hail claims.

State Farm says the program aimed to address both overpayment and underpayment.

The company also says it has paid more than $1 billion to Oklahoma customers for wind and hail damage over the past two years.

On Jan. 16, 2026, State Farm asked the Oklahoma Supreme Court to block the attorney general from the case.

Insurance commissioner backs the AG

On Jan. 29, 2026, Oklahoma Insurance Commissioner Glen Mulready sent a letter formally asking Drummond to keep investigating and prosecuting the case.

That move undercut State Farm’s argument that insurance regulation belongs only to the commissioner’s office.

Within a day of Mulready’s letter, the Oklahoma Supreme Court canceled its previously scheduled oral arguments. The court rescheduled them for March 25, 2026.

The U.S. Chamber of Commerce and industry trade groups filed a brief supporting State Farm’s position.

Case could cross into criminal territory

Drummond has said his office is looking into possible criminal racketeering violations under Oklahoma’s version of the Racketeer-Influenced and Corrupt Organizations Act.

He told NBC News that if a deliberate scheme to defraud Oklahomans can be proven, the case could move into criminal proceedings. No criminal charges have been filed yet.

In a separate case back in 2018, State Farm paid about $250 million to settle a racketeering lawsuit in Illinois that alleged the company helped install a favorable justice on the state supreme court.

Oklahoma pays some of the highest insurance costs

Oklahoma ranks among the most expensive states for homeowners’ insurance.

The average annual premium runs about $4,695 for $300,000 in dwelling coverage, nearly double the national average.

State Farm controls roughly 30% of the Oklahoma homeowners’ insurance market, making it the dominant player in the state. Nationally, State Farm is the largest home insurer in the country.

Over the past three years, Oklahoma insurers have paid out more in losses than they collected in premiums.

Lawmakers push reform bills in response

The Oklahoma Insurance Department announced a package of 2026 proposals aimed at strengthening consumer protections.

Reforms include shorter deadlines for claim responses, a homeowner’s claims bill of rights, and a ban on denying claims based only on aerial images.

House Bill 2933 would require insurers to report policy changes and rate increases to the state insurance department.

A separate bill, SB 726, which critics said would have removed penalties for insurers that delayed claims, failed 72-18 in the state House.

Supreme Court hears arguments March 25

The Oklahoma Supreme Court is set to hear oral arguments on March 25, 2026, on whether the attorney general can stay in the case.

The outcome could shape how aggressively state officials step into insurance disputes going forward. New lawsuits against State Farm continue to pile up across Oklahoma.

Drummond has framed the fight as a test of whether insurance companies can charge higher premiums while quietly reducing what they actually cover.

This article was created with AI assistance and human editing.

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