BROKEN ARROW, Okla. — Billy Hursh couldn’t believe what he was hearing from his insurance company.
After a hail storm battered his roof in October 2023, two different contractors told him he needed a full roof replacement, but his insurance company, State Farm, told him the roof was in “fair” « condition.
That dispute eventually led to what would become a yearslong legal battle that has now reached the highest court in the state.
Hursh told NBC News during an interview at his home that the first storm was bad enough, but eight months later, an even bigger storm hit.
“The trees are blowing sideways, and you can hear the hail, and the power is flickering on and off,” Hursh remembered.
And the damage to his roof grew worse.
This time, the Hurshes called a State Farm-recommended contractor to come look at their roof. Again, a full replacement was recommended. State Farm did agree the roof was damaged — but deemed it « minor. »
“They said that any damage was under the deductible, and therefore not covered,” Hursh said.
Afraid of what could happen to their home if another storm hit, Hursh and his wife, Lacy, decided to pay out of pocket to replace the roof.
“It’s how much pain, how much hardship financially are we willing to take on up front to avoid disaster later on?” he said.
The answer: more than $22,000, borrowing against the equity of their home for the cost.
“It makes you feel like a sucker,” Hursh said. “Like I was foolish to have thought that the insurance company would hold up their end of the bargain.”
“I had no idea the degree to which we were being taken advantage of,” he said.
Allegations of a secret scheme
The Hursh family decided to take action, filing a lawsuit in state court that lays out a “pervasive, state-wide fraudulent Scheme” by which State Farm aimed to cut costs through “bad faith claims handling tactics that are rigged against the insured.”
According to the lawsuit, the company developed a “Hail Focus Initiative” — secretly narrowing the definition of hail damage to reduce the amount of full roof replacements covered by State Farm.
“State Farm uses this definition to dictate whether an insured is entitled to payment under the policy upon the filing of a valid wind and/or hailstorm claim, yet it can be found nowhere in the policy,” the lawsuit says.
The alleged hidden policy essentially creates a reality where homeowners’ insurance claims are denied before they’re even filed.
“This decision reflects simple greed: maximizing profits for State Farm at the expense of its insureds,” the lawsuit argues.
The Hursh family isn’t alone. Law firms told NBC News that more than 600 homeowners in Oklahoma have similar lawsuits pending against the company, which is the No. 1 property insurer in the state.
State Farm declined NBC News’ request for an interview, but in legal filings denied any wrongdoing, calling the initiative “an effort State Farm first undertook in 2020 to improve the accuracy, quality, and consistency of wind/hail claims handling and to address both overpayment and underpayment of claims.”
In a statement to NBC News, the company said that “over the past two years, State Farm has paid more than $1 billion to Oklahoma customers for wind and hail damage to their homes and property.”
A powerful ally
Late last year, the Hurshes gained a powerful ally in their fight against State Farm: Oklahoma Attorney General Gentner Drummond.
In December, Drummond filed a motion to intervene in their case, writing: “Oklahomans can weather inflation and Oklahoma storms, but they cannot withstand a system in which they are charged more while effectively insured less.”
“What we have here is what I believe is an intentional scheme to defraud customers,” Drummond said in an interview with NBC News. “We’ve discovered and reached a conclusion that State Farm has a scheme of deception. They’re violating their duty of good faith and fair dealings to Oklahomans, and that involves me intervening and holding them accountable.”
State Farm opposed the motion to intervene, arguing that the attorney general’s office has no regulatory authority to investigate the company.
A state court disagreed and granted Drummond’s motion, allowing him the power to not only investigate, but potentially gain discovery into prior settlements between State Farm and Oklahoma homeowners.
State Farm appealed; the decision is now with the state’s Supreme Court.
While the case plays out in civil court, Drummond isn’t ruling out the possibility of bringing even more serious charges against the company. He said his office is exploring possible racketeering violations of the company under the Oklahoma Racketeer-Influenced and Corrupt Organizations Act, otherwise known as ORICO.
“There may be a scheme inside of State Farm’s leadership to intentionally defraud Oklahomans, and if that can be proven,” Drummond told NBC News, “that RICO will cross into the criminal world.”
The case could take months to resolve. But for Billy Hursh, having his day in court already feels like a win.
“If I can help protect my family and maybe help protect someone else’s family … it’s worth everything, » he said.
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