In 2021, one State Farm captive agent couldn’t forget a phrase. He said that trying to get information from the company’s claims adjusters was like getting answers from a “secret society.” He wasn’t making a scene. It looked like he wasn’t the only one who was angry.
That anger has now been written down in court. Recently, a judge in Oklahoma’s Comanche County brought public 31 documents that State Farm’s lawyers had worked hard to hide. Lawyers for hundreds of Oklahoma homeowners say that those documents show a planned, year-long effort to lower insurance payouts after hail and wind damage, a scheme that they say made the company $1.4 billion.
Even though it’s still not clear how many policyholders were affected, it’s hard to ignore how widespread the claims are. Our state’s biggest insurance company is State Farm. When a big company is accused of consistently underpaying storm claims, it has effects that go beyond homeowners putting tarps on their roofs to fix them.
According to the documents, State Farm employees chose roof replacements as “the biggest bucket of opportunity” for lowering payouts. Nicole Manduca, an executive, called this “the biggest bucket of opportunity.” A 2020 internal planning document says that 57% of State Farm’s claims in Oklahoma were for roof damage from hail and wind storms. After that, adjusters were taught to favor repairs over replacements. More requirements for signing off were added. That was the point, it looks like: to make it a little harder to get a new roof.
All of this might not come as a surprise to people who have ever made a big insurance claim. It’s almost a cultural memory for people who live in storm country to call their insurance company after a disaster, wait, and negotiate while still feeling like they’re leaving money on the table. There is something different about seeing it written down in internal planning documents that use business language and include the names of executives.
Oklahoma’s home insurance rates have gone up along with the rest of the country’s. Because of climate change, there are more and worse storms, and the state now has the sixth highest home insurance costs in the country. Being shortchanged on a claim hurts more for homeowners who already pay more to stay covered. The policyholders’ lawyer, Reggie Whitten, told the local news station KFOR that the documents make it clear why so many customers never got paid in full.
State Farm, on the other hand, fought back hard. A spokesperson for the company said that State Farm has paid out more than $1 billion in claims in Oklahoma because of severe weather. The spokesperson also warned people not to jump to “broad, misleading conclusions” from “disputed allegations.” The business said it would continue to help communities get back on their feet after disasters. That might be true a lot of the time. But the documents that were not sealed show that at least some employees, such as agents and contractors, thought the claims process wasn’t working the way it was supposed to.
As I watch this happen, I get the sense that this case is more than just a legal dispute between a business and its customers. It’s turned into a test. People in Oklahoma’s race for governor have reportedly paid attention. It’s being watched by the state’s government. People across the country who own their own homes may also be watching. Many of them have quietly accepted underpayments and moved on.
The documents are already out in the world, no matter what the courts decide. Because it’s hard to keep something secret after it’s no longer a secret, as any good reporter or angry insurance agent knows.
