Attorney general launches separate Cleveland County case alleging insurer used companywide strategy to underpay hail and wind claims
OKLAHOMA CITY — Attorney General Gentner Drummond filed a new lawsuit against State Farm on Wednesday, one day after the Oklahoma Supreme Court ruled he could not pursue statewide consumer protection claims through an existing homeowner lawsuit.
The new case, filed in Cleveland County District Court, accuses State Farm Fire and Casualty Company of engaging in a coordinated scheme to deny or underpay legitimate hail and wind damage claims submitted by Oklahoma homeowners. According to the petition, the insurer used an internal program known as the “Hail Focus Initiative” to reduce roof replacement approvals and minimize claim payments.
The filing comes one day after the state’s highest court unanimously removed Drummond from a lawsuit originally brought by Oklahoma County homeowners Billy and Lacy Hursh. The court ruled that while the attorney general may pursue claims on behalf of the state, those claims must be filed in a separate action rather than attached to a private lawsuit.
Drummond responded immediately Wednesday by filing the new case.
“This case is about more than individual claim disputes,” Drummond said in a statement. “The allegations describe a corporate scheme that threatens the integrity of Oklahoma’s insurance marketplace and undermines public confidence in an industry families rely on when disaster strikes.”
According to the attorney general’s office, State Farm marketed homeowners policies as providing replacement-cost coverage for storm-related damage while allegedly using undisclosed internal standards to limit coverage and deny valid claims. The lawsuit alleges the company employed restrictive claims-handling practices and outcome-oriented engineering reviews designed to reduce claim payments and increase profits.
The state asserts claims under the Oklahoma Consumer Protection Act and Oklahoma’s Racketeer-Influenced and Corrupt Organizations Act, along with common-law claims for civil conspiracy and unjust enrichment. The lawsuit seeks injunctive relief, civil penalties, restitution, disgorgement of profits and other remedies authorized by law.
The filing follows Tuesday’s Oklahoma Supreme Court decision, which blocked enforcement of a district court order that had allowed Drummond to intervene in the Hursh lawsuit against State Farm. The attorney general had attempted to expand that case into a broader statewide action alleging consumer protection violations and other misconduct by the insurer.
“It is unacceptable that Oklahomans are paying rising homeowners insurance premiums yet receiving less protection in return,” Drummond said. “Inflation and weather do not explain, let alone justify, the widening gap between what Oklahomans pay and what they receive.”
The underlying lawsuit was filed by Oklahoma County homeowners Billy and Lacy Hursh, who allege State Farm improperly handled a hail-damage insurance claim involving their home. Drummond later sought to intervene on behalf of the state, alleging broader violations affecting policyholders across Oklahoma.
The Supreme Court’s ruling did not address the merits of those allegations. Instead, it focused on whether the attorney general could pursue statewide claims within an existing private lawsuit. The court concluded he could not, but specifically indicated those claims could be brought separately.
Wednesday’s lawsuit begins that next phase of the legal battle.
