Oklahoma Judge Orders State Farm to Turn Over Internal Records

Ruling in Homeowners Insurance Case Could Affect Policyholders Nationwide

Court Rejects Bid to Limit Discovery

NORMAN, Okla. — State Farm must produce internal underwriting and claims documents in a lawsuit that could have broad implications for homeowners across the country, an Oklahoma judge ruled Friday. The decision came during a hearing in a case brought by Don and Brenda Foster, who accuse the insurance giant of improper claims handling after a 2021 storm damaged their home.

Cleveland County District Judge Thad Balkman denied State Farm’s request to reconsider a previous discovery order, saying the company had not shown that producing the materials would be too burdensome. He also instructed State Farm to provide its program data in its original format rather than in PDFs.

Allegations of Underpayment

The Fosters’ lawsuit, filed in November 2023, claims that State Farm’s in-house adjuster conducted an inadequate investigation that confirmed covered damage but reported no harm to the roof shingles or interior. The suit accuses the company of breach of contract, bad faith, fraud, negligent procurement and punitive damages.

The case is one of many involving State Farm’s homeowners insurance practices in Oklahoma. Plaintiffs’ attorneys argue the company uses a “company-wide practice” to underpay wind and hail claims by redefining what counts as damage. They say State Farm’s internal process allows it to avoid paying for full replacements.

Weather-related claims have put pressure on insurance markets in the state, but Oklahoma Attorney General Gentner Drummond has suggested that rising premiums may not be explained by weather alone. Drummond has intervened in a separate case, Hursh v. State Farm, which he describes as key to examining the company’s “Hail Focus Initiative.” The Foster lawsuit is further along procedurally, and discovery has already been compelled.

“Inflation and weather do not explain, let alone justify, the widening gap between what Oklahomans pay and what they receive,” Drummond said.

Dispute Over Valuation Tools

Central to the discovery fight is State Farm’s use of software programs that help set coverage limits and estimate repair costs. The company uses 360Value, created by Verisk Analytics, along with Xactimate for claim evaluations. Critics argue the tools can generate inaccurate values.

Attorney Jeff Marr, who represents the Fosters, said State Farm now uses a customized, simplified version of 360Value that excludes information necessary to value a home accurately. He noted that investigators in California found the tool underinsured homes destroyed in wildfires by 25 percent or more.

State Farm told the court that producing program materials in their native format would be too expensive. Marr argued that producing PDFs would cost more and said the original format shows what the company “considered, disregarded and verified.”

Marr pointed to State Farm’s recent financial results, saying the company had “record profits: $145.2 billion record net worth,” and cited additional figures about CEO compensation and advertising spending.

What Comes Next

Judge Balkman said State Farm’s burden argument was not convincing and that previous discovery efforts had already occurred. He ordered the company to comply with the original discovery directive.

According to Marr, State Farm now has until April to provide the documents. He hopes the case will move to trial this summer.

He said the broader pattern involves raising rates, then changing internal definitions of what counts as damage, and finally using claims practices he described as restrictive. Marr compared the process to “a sports bookie,” saying State Farm changes the terms after the fact.

A May 2025 court filing shows the Fosters were offered a $130,000 settlement. Marr said some practices must be brought to light and argued the issues extend beyond Oklahoma.

State Farm said in a statement that it handles claims with “personalized care and a strong commitment” to ensuring customers receive all benefits under their policies. The company said it looks forward to presenting the facts in court.