Legal experts say settlement is an easy way out for State Farm
Legal experts say settlement is an easy way out for State Farm
Dylan Brown / KFOR Sat, November 14, 2026 at 1:25 AM UTC
0
OKLAHOMA CITY (KFOR) - Alarm bells were ringing Friday, according to several legal experts, after a settlement announcement set to make State Farm pay back around $35 million to customers who weren't paid on certain hail damage claims.
The announcement came from the Oklahoma Insurance Department, which concluded its years-long roof claims investigation.
In it were several findings, including 27 of 58 State Farm clients who submitted claims for their roofs and didn't get paid. They found that there were several records that State Farm didn't end up turning over in a timely fashion.
According to the department, an examination found that State Farm improperly denied or failed to pay for roof damage and necessary repairs that were submitted by insured Oklahoma homeowners on claims regarding damage from strong winds and hail.
State Farm settles for more than $45 million following investigation into Oklahoma roof damage claims
The settlement will dedicate at least $35 million to help affected families, $10 million to the state’s Strengthen Oklahoma Homes grant program, and $2.86 million in fines and examination costs to OID.
The catch, some legal experts are sounding the alarm on, is that if you want to get payments from the settlement, you have to ditch the litigation.
Advertisement
"They are going to have to sign off and release that litigation," said Insurance Commissioner Glen Mulready.
"I would not advise anybody who has a pending lawsuit against State Farm to abandon that lawsuit to join this settlement," said Nick Marr of MARR Law Firm.
Marr has represented several State Farm clients with claims that went unpaid. He said that of course he has a bias, but from outside, he wouldn't suggest signing off because you would get more money from the lawsuit than from the settlement itself.
"I think more likely than not, if you currently have a lawsuit against State Farm, you're probably more likely to get a better recovery from the lawsuit than you are from this process, which is still not finalized prt, by the way," said Marr.
He also pointed to the deadline; if you want to be included in the settlement, Mulready said you need to be a lookout for a State Farm letter in the mail and that State Farm has to get that in by the December 31, 2026 deadline.
"That is, in my opinion, an alarmingly short deadline. That is just over a month for something that was announced today. That's an incomplete process for people to make a decision that is all the more reason I would speak with an attorney first, because you may agree to something that we don't even know what it is yet," said Marr.
"State Farm disagrees with findings and characterizations in the Oklahoma Insurance Department's market conduct examination report. We evaluate each claim based on the facts of the loss and the customer's policy. Over the past five years, State Farm has responded to more than 100,000 claims in Oklahoma. A limited review of individual claims should not be mistaken for a complete picture of our overall claims-handling practices.
While other insurers reduced coverage or exited Oklahoma, State Farm remained committed to the state despite more than $178.5 million in net underwriting losses from 2021 through 2025 and more than half a billion dollars over the past 20 years.
State Farm has reached a settlement with OID that provides a path forward for customers, including a claims review program for eligible Oklahomans and a contribution to the Strengthening Oklahoma Homes Program to help homeowners better prepare for future storms.
Severe weather, rising repair costs, and affordability pressures continue to challenge Oklahoma's insurance market. Our commitment remains unchanged: treating customers fairly, paying what we owe, and maintaining the financial strength to be there when the next storm strikes," said State Farm in response to the findings and settlement.
"I would say that State Farm is more profitable today than it has ever been in its existence," said Marr. "State Farm, according to its own documents, has captured more than $1 billion by paying less on wind and hail claims. This is a drop in the bucket compared to what they've taken from their policyholders."
Attorney General Gentner Drummond, who filed a civil lawsuit against State Farm in Cleveland County District Court, said, "Oklahoma homeowners deserved accountability. While this settlement may look good on the surface, the fine print gives State Farm a way out. Homeowners must sign away their bad-faith claims, and those who have sued must drop their lawsuits to get paid under this 11th-hour agreement. Even then, the most they can recover is what State Farm owed them in the first place, and any money left goes back to State Farm. On top of that, the agreement bars the Oklahoma Insurance Department from ever seeking further penalties for this conduct and prohibits the next Insurance Commissioner from examining State Farm’s practices for 12 months, all while State Farm admits no wrongdoing. That’s not consumer protection. It’s corporate protection. My office’s lawsuit will continue, and we will keep fighting for every Oklahoma family that was wrongly denied.”
Copyright 2026 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. For the latest news, weather, sports, and streaming video, head to KFOR.com Oklahoma City.
Source: “AOL Money”
