Allstate Sued by Oklahoma for Alleged Scheme to Underpay Claims

Oklahoma’s attorney general sued Allstate Corp., alleging the insurer schemed to minimize payouts to homeowners for wind and hailstorm damage in order to boost its profits.

The state’s top lawyer, Gentner Drummond, alleges that Allstate implemented an internal program to drastically deny or minimize payments of legitimate covered losses, according to the lawsuit filed Tuesday in state court in Cleveland.

“This lawsuit is about protecting Oklahoma homeowners and holding insurance companies accountable when they fail to honor the promises they make to policyholders,” Drummond said in a statement. “Consumers pay their premiums expecting their insurance company to be there when disaster strikes.”

The state attorney general seeks civil penalties and aims to dismantle the insurer’s alleged racketeering enterprise, according to the complaint.

A representative for Allstate didn’t immediately respond to a request for comment.

Insurers across the U.S. face increasing scrutiny over their claims-handling practices as losses from weather-related events such as hurricanes, wildfires and hail storms pile up as a result of climate change.

In California, the state’s insurance regulator alleged State Farm General Insurance Co. mishandled claims related to the 2025 Los Angeles wildfires and said in May that it was seeking millions of dollars in penalties.

In Oklahoma, Drummond claims that third-party engineering firms and adjusting companies participated in the alleged scheme with Allstate, providing reports that supported predetermined objectives to deny or reduce claims.

The lawsuit also alleges that Allstate and its network of agents engaged in deceptive sale practices, incorrectly telling clients their homeowners’ insurance would provide full replacement coverage for wind or hail damage.

Top photo: The Allstate logo Photographer: Tiffany Hagler-Geard/Bloomberg.