The May 21, 2024, hailstorm that struck Tulsa County, Okla., left Tim Willard with a roof torn by golf ball–size hail. An adjuster initially told him the roof needed replacement, but State Farm later denied the claim and canceled his policy, leaving him to borrow and spend savings to replace the roof so another company would insure his home. Willard later sued State Farm.
Willard’s experience is echoed in hundreds of lawsuits nationwide alleging that State Farm, the country’s largest home insurer, has been running a covert program to reduce payouts for hail and wind damage. NPR reviewed nearly two dozen such lawsuits and court records that, plaintiffs’ lawyers and Oklahoma’s attorney general say, outline a companywide effort dating to 2020 to limit full roof-replacement payouts.
At the heart of the allegations are two tactics plaintiffs say State Farm uses. First, adjusters allegedly apply internal definitions and exclusions—such as a “functional damage” standard—that do not appear in customers’ policies to deny claims. In Wisconsin, Nicole Maziasz says State Farm denied her 2023 hail claim after an engineer hired by the insurer said her shingles showed no “functional damage,” even though her policy did not define that term. The Maziaszes sued and later settled for roughly the cost of their new roof and attorneys’ fees.
Second, plaintiffs allege State Farm directed managers to review and overturn adjusters’ recommendations for full replacements to ensure the company’s internal standards were applied. A former claims specialist, Amy Lanier, testified in a 2022 deposition that teams were told to deny claims even when adjusters believed payment was warranted; she said her conscience troubled her when she had to tell insureds their roofs were “wear and tear” rather than hail damage. State Farm’s lawyers deny there is any broader requirement that managers overrule adjusters.
State Farm, defending itself in multiple courts, says the 2020 initiative was aimed at improving the accuracy of claims handling and correcting over- and underpayments. The company told NPR it pays what it owes under policy terms and that it works to protect customers from predatory contractors and lawyers. In filings, the company has disputed characterizations that it secretly changed coverage, calling such claims private disputes that don’t involve public funds.
Oklahoma appears to be the epicenter of the litigation: more than 600 lawsuits were pending against State Farm there this spring, and Republican Attorney General Gentner Drummond has intervened in at least one case, accusing the insurer of “secretly and fraudulently” withholding information about coverage restrictions applied internally. Drummond says state intervention is needed because settlements tend to keep corporate behavior quiet and may not deter repeat conduct.
The legal pressure comes as homeowners face growing threats from climate change. Rising temperatures are fueling more intense storms, floods and wildfires, increasing property damage and contributing to sharp insurance rate increases. Since 2021, the average U.S. home insurance cost rose about 46%, roughly three times inflation. Insurers also are pulling back from some high-risk regions; nonrenewal rates rose sharply in states such as Florida, South Carolina, California and Oklahoma between 2018 and 2023, according to a Senate Budget Committee report.
Hail is a major driver of insured losses. The Insurance Information Institute reported hail contributed to $51 billion in insured losses from severe storms in a recent year, and hail often accounts for up to 80% of severe-storm claims. State Farm told NPR it has paid more than $1 billion for wind and hail damage in Oklahoma over the past two years and characterized its homeowner policy as among the broadest in the industry.
Plaintiffs’ attorneys contend the insurer benefits from writing policies without disclosing the internal exclusions it uses to evaluate hail damage. Ryan Graff, who represented Maziasz, says State Farm could avoid litigation by disclosing in policy language the coverage limitations it applies—but does not—because nontransparent policies draw more customers. Carole Dulisse, an Oklahoma plaintiffs’ lawyer, says State Farm is effectively rewriting policy terms to create exclusions that don’t exist in the written contracts.
Industry groups and State Farm have pushed back, arguing that aggressive plaintiff advertising and frivolous lawsuits raise costs for everyone. The Insurance Information Institute launched campaigns in some states warning of “legal system abuse,” saying that billboard lawyers drive up premiums. But plaintiffs’ lawyers counter that state regulators often tell consumers to sue when they complain, leaving litigation as the only meaningful recourse.
Regulators and prosecutors are also active. The Los Angeles County Counsel probed allegations State Farm delayed, underpaid and denied wildfire claims in California. State Farm paid $100 million in 2022 to settle federal allegations related to its handling of Hurricane Katrina claims; the company said at the time it was glad to end long-running litigation.
Some courtroom outcomes have sided with homeowners. A jury in an Oklahoma federal trial ordered State Farm to pay $325,000 for bad-faith denial of a roof claim plus breach-of-contract damages, and recent Oklahoma settlements include multi-million-dollar payouts, though confidentiality agreements often surround those deals. Plaintiffs’ lawyers say the settlements and continued denials indicate the company is not changing course.
Oklahoma’s attorney general argues penalties must be large enough to deter future misconduct and says his office is examining other insurers as well. He frames intervention as necessary “when regulation fails.” The National Association of Insurance Commissioners told NPR that state regulators investigate every formal consumer complaint and frequently resolve disputes without litigation, but acknowledged consumers should have judicial access if they feel state rules were violated.
As extreme weather intensifies and hailstorms become more common across the central and eastern U.S., homeowners increasingly confront not only larger repair bills but uncertainty about whether insurers will pay. Plaintiffs and some officials say that lack of transparency about how claims are evaluated undermines trust and leaves homeowners exposed to financial ruin when they cannot secure coverage or recover fully after a storm. State Farm insists it follows policy terms and denies engaging in illicit conduct; its critics say the pattern in multiple cases and depositions shows a deliberate program to minimize roof-replacement payouts and shift costs away from the insurer.