An Oklahoma family, the Woodards, is suing Allstate's subsidiary, Encompass Insurance Company, alleging a systematic effort to undervalue their tornado damage claim from April 2023. The lawsuit, filed in April 2024, claims bad faith practices by the insurer, forcing the family to remain displaced three years later, living in a shop on their property that is less than half the size of their former home while still making mortgage payments. Their contractor estimated a complete rebuild at $252,500, an assessment supported by Chris Ramsayer, a structural engineering advisor at the University of Oklahoma, who stated that repairing the home would exceed the cost of replacement.
The lawsuit centers on claims that Encompass pressured independent adjusters to alter damage assessments and reduce payouts. Evidence presented in court included a recorded conversation where a general contractor, Quinton Hughes, initially assessed the need for a complete rebuild but expressed concerns about company repercussions if he didn't align his report with Encompass's preferred outcome. Allstate's Executive Vice President and Chief Claims Officer, Mike Fiato, testified in a congressional subcommittee hearing that company data indicates estimates are reduced approximately 27% of the time, and increased only 9% of the time. The plaintiffs' attorneys, Nick and Jeff Marr, argue this demonstrates a company-wide pattern of misconduct to maximize profits, a claim supported by a representative of Encompass who acknowledged the accuracy of a U.S. Senator's characterization of the company's strategy.
District Judge Michael Tupper ruled in favor of the plaintiffs, ordering Allstate to produce internal documents, policies, procedures, training materials, and data reports related to vendor estimate modification practices for the five-year period preceding the 2023 loss. This ruling acknowledged "pretty persuasive evidence" of potential manipulation of vendor estimates. The plaintiffs are also seeking analyses conducted by Allstate regarding reductions in indemnity payments on homeowners' claims. The deadline for document production is March 24, and the Marr family intends to depose Fiato, confident their clients are prepared for trial.
