Lawsuits accuse State Farm of secretly working to cut insurance payouts

Climate Lawsuits accuse State Farm of secretly working to cut insurance payouts April 28, 20265:21 AM ET Heard on Morning Edition By Michael Copley Lawsuits accuse State Farm of secretly working to cut insurance payouts Audio will be available later today. A support scientist looks at radar on his phone while tracking a supercell thunderstorm in Oklahoma. Hail damage contributed to $51 billion in insured losses last year from severe storms, according to the Insurance Information Institute, an industry-backed think tank. Drew Angerer/Getty Images hide caption toggle caption Drew Angerer/Getty Images The storm swept into Tulsa County, Okla., around dinnertime on May 21, 2024, hammering people's houses with hail the size of golf balls. It was so loud that when a neighbor called Tim Willard, he couldn't make out what they were saying on the phone. Afterward, Willard walked outside his home to see shingles ripped from the roof and a lawn covered by an inch of ice. "These were jagged hailstones," Willard says. "They were coming just straight down and just peppered everything." Weeks later, Willard claims that an adjuster for State Farm, his home insurer, said his roof should be replaced. But that same day, State Farm reversed itself and denied Willard's insurance claim. Soon after, State Farm canceled Willard's coverage, leaving him with a battered roof that no other company would insure. Sponsor Message Climate Risk Hits Home It's harder to get home insurance. That's changing communities across the U.S. "I'm kind of like most Americans: I just don't have 20 grand sitting in the bank" for a new roof, Willard says. But he worried that without coverage for his roof, the next hailstorm or tornado could be financially devastating. So he pulled money from savings and borrowed the rest to replace the roof, which enabled him to get insurance coverage elsewhere. Then, Willard sued State Farm, the country's largest home insurer. Willard's allegation that State Farm, which sells home insurance in 47 states and Washington, D.C., refused to pay what it owed for hail damage is echoed in hundreds of lawsuits nationwide. In one of them, a former State Farm employee testified that the company's actions were putting it at risk of being sued. Some of those suits ended with multimillion-dollar settlements to homeowners, who are subject to confidentiality agreements as part of the deals. As part of NPR's ongoing coverage of extreme weather's impact on the home insurance industry, we reviewed nearly two dozen lawsuits involving insurance claims following hailstorms, which often cause extensive property damage. The litigation sheds light on the specific strategies that one major insurer allegedly uses to deny coverage. The epicenter of the hail litigation appears to be Oklahoma, where more than 600 lawsuits were pending against State Farm as of this spring, according to a law firm handling some of the cases. Oklahoma's Republican attorney general has joined one of the lawsuits, alleging that State Farm has been running a secret scheme to deny and minimize payments for roof damage from hail and wind. Sponsor Message Climate Risk Hits Home Why home insurance is unaffordable, even in places without wildfires or hurricanes State Farm's lawyers denied Willard's allegations in a filing in Oklahoma state court. Asked about accusations that it operated a wide-ranging program to cut insurance payouts for hail and wind damage, State Farm said in a statement to NPR that it…

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