Oklahoma family displaced by tornado files lawsuit against Allstate
An Oklahoma family, displaced by a tornado, has filed a lawsuit alleging Allstate pressured adjusters to alter damage reports.
- An Oklahoma family has been displaced for nearly three years after a tornado destroyed their home in April 2023.
- The family is suing their insurance provider, an Allstate subsidiary, for allegedly pressuring adjusters to alter damage reports to reduce payouts.
- A judge has ordered the insurer to produce internal documents related to its claim adjustment practices over a five-year period preceding the loss.
When 130-mile-per-hour winds tore through Blanchard on the evening of April 19, 2023, Jacob Woodard’s pregnant wife, Mallory, and their daughter hunkered down in a bathroom in their house as a tornado ripped the roof completely off it. Rain poured through the exposed rafters, soaking virtually everything inside. Insulation blew through the house like confetti. The walls buckled and ridge beams failed.
Jacob Woodard arrived home moments after the storm to see his family was unscathed, but the house was far from it.
Nearly three years later, the couple and their two children are still displaced from their home, now living in a renovated shop on their property that’s less than half the size of the house at under 1,000 square feet.
The family’s wait draws out while their insurance company, Encompass, a wholly-owned subsidiary of The Allstate Corporation, continues to dispute the homeowners’ claim as they make payments on a property they can’t even live in. Allstate and Encompass didn’t respond to requests for comment to The Oklahoman.
The Woodards filed a lawsuit against Encompass in April 2024. Their representation, Jeff Marr and his son Nick Marr of the Oklahoma City-based Marr Law Firm, say the plaintiffs’ nightmare extends well beyond the tornado itself. The case, Jeff Marr says, has uncovered what may be one of the most “egregious examples of insurance bad faith” he’s encountered in his career, calling it a “systematic scheme” in which Allstate allegedly pressured independent adjusters to alter their damage assessments to reduce claim payouts.
The Woodard case is emblematic of a broader crisis unfolding across the insurance industry. It comes as State Farm, also one of the nation’s largest homeowners insurance carriers, faces similar allegations of systematic bad faith practices designed to reduce payouts to policyholders. The Woodard lawsuit against the Allstate subsidiary joins hundreds of cases filed of that nature. Additionally, the timing is particularly significant in Oklahoma, where homeowners face some of the highest insurance rates in the U.S.
Marr said depositions and recorded conversations reveal Allstate’s bad faith practices.
“This isn’t about just one family,” Marr said. “This is about a pattern of behavior that’s been the subject of investigation at the highest levels.”
Woodard home after 2023 tornado hit Blanchard, Oklahoma
The Woodard’s family home in Blanchard was destroyed by a tornado in 2023. Jacob Woodard arrived home shortly after the storm passed through the area.
According to the initial filing, the Woodards specifically requested replacement cost coverage that would fully replace their property in the event of a loss. Their agent assured them the policy would do exactly that.
After the storm, the Woodards called their agent promptly, and emergency vehicle sirens could be heard during the initial calls made to the company. However, what followed, according to a filing, was a months-long ordeal of delays, denials and dismissals of their contractor assessments.
Altered reports
Encompass sends third-party adjusters to look at policyholders’ property damage. The company deployed Russ Mackey from Pilot to make an estimate on the Woodard’s home, according to a filing, which also states Mackey said the damage was so severe that he wanted to get an engineer to take a look, and he felt unqualified to move forward.
The insurance company then sent out someone from Donan Engineering, one of the preferred vendors. The engineer wrote the report, noting structural damage, according to a motion to compel filing by the plaintiffs, which states Encompass asked the Donan engineer to add more information to the report, detailing how the Woodard’s home could be repaired.
But the Woodards’ contractor, Dawk-5 Contracting, was of the opinion that a repair would mean the entire structure needed to come down. Woodard was given an estimate for $252,500 to build it back from the ground up. Chris Ramsayer, a structural engineering advisor with the University of Oklahoma, agreed in his report after assessing the damage to the home.
“It is my professional opinion that the cost to repair the home and return it to the condition prior to the tornado exceeds the cost to totally replace the structure,” Ramsayer said in his report.
With competing assessments, Marr said Encompass insisted on bringing out a third inspector, and Jacob Woodard reluctantly agreed after being assured by an Allstate manager that person wouldn’t be influenced by the insurance company to describe the damage in a way that favored them.
Quinton Hughes, general contractor with Jenkins Restorations, was sent out to the Woodard residence by Encompass. Woodard recorded the interaction and subsequent correspondence. Transcriptions and recordings were sent to The Oklahoman for review.
“My opinion is, dude, you need a new house, man,” Hughes said in a recording. “Like, I mean, it’s plain and simple.”
Hughes said in the call he intended to send Encompass his assessment telling them the Woodard’s home needed a complete “demolition and removal,” but to protect himself, he ultimately differs to the opinion of the company because they might tell him he can’t say that.
“(Encompass will) be like, ‘No, the engineering report says it doesn’t need to be knocked down and rebuilt,’” Hughes said to Woodard. “They’ll kick it back and be like, ‘No, the engineer’s report says this,’ and I’d be like, ‘Ok, well, I have to write it for that because I’m on (Encompass’) program.’”
Much to Woodard’s dismay, the eventual estimate via Allstate mirrored what the company was telling him before Hughes was sent out. A full rebuild was not included in it. In the depositions, Marr said they found out Encompass didn’t look at Ramsay’s report, let alone refute it.
Woodard called Hughes to inquire about the estimate, starting the conversation by asking if he remembered saying he would advise Encompass the house needed to be torn down and rebuilt. Hughes said he did, and followed up with his own question about their previous conversation.
“Do you also remember the conversation that we had directly following that, where I said, ‘What they were going to do is, they were going to tell me I couldn’t do that, and they were going to say no,’” Hughes said in the call.
“Yes,” Woodard replied.
“ … They said ‘No, there’s a structural engineering report that states that is not the case. Please write according to structural engineering specifications.’ And so that’s where we got left at, was that,” Hughes said.
Motion to compel hearing
At a Tuesday hearing before District Judge Michael Tupper in Cleveland County, Nick Marr conducted a presentation recapping the events that have transpired since the April 2023 tornado.
After playing the last recorded conversation between Hughes and Woodard, Marr didn’t mince his words.
“Your honor, Allstate lied to these folks,” Marr said. “(Allstate) told them they would go off of the opinion of this objective third party, and then they made that third party change his mind so they could pay out less.”
Marr tied the Woodard case to a 2025 congressional subcommittee hearing, in which U.S. Sen. Josh Hawley, R-Mo., accused Allstate of a longstanding, company-wide pattern of misconduct to maximize profits.
The federal scrutiny, Marr argued, demonstrates that the systematic pressure on adjusters documented in the Woodard case is not an isolated incident.
Hawley gave an overview at the meeting’s start, and Marr referenced multiple clips during his presentation Tuesday, starting with the senator’s opening comments.
“When a disaster destroys, let’s say, your home, the insurance company sends out an adjuster, often a third-party. That person writes up a report, often in good faith, doing their best to estimate the damages,” Hawley said. “And then what happens? Then the insurance company says, ‘You need to change the facts that you found. You need to change your estimates.’ … And they adjust the (award arbitrarily) down, down, down. And the policyholder never knows. And the policyholder gets no say in the process.”
After playing a clip from the subcommittee hearing of a contractor testifying to being directed to alter his reports, Marr then played a brief clip from the deposition of Sheila Eckhoff, a representative of Encompass. In the video, plaintiff representation plays Hawley’s characterization of the company’s strategy, before asking Eckhoff if that’s “precisely” what was found in the recordings of the third-party vendor.
“Yes,” Eckhoff said in the deposition.
To make the case that indicators of a pattern in practice justify discovery of company data, Marr cited Reibert v. CSAA Fire & Casualty Insurance Company. The lawsuit pertains to claims of breach of contract and bad faith by the insurer after a 2016 wind storm in Oklahoma, according to Justia. The court affirmed that information is discoverable if it’s relevant to “a pattern theory of bad faith conduct.”
Marr said he “couldn’t agree more,” and that’s what led to their request for production.
Plaintiffs are requesting analyses conducted by Allstate, or on its behalf, regarding reduction in indemnity payments or spend on homeowners’ claims since 2015. Allstate doesn’t argue the existence of such documents. Marr assumes that’s likely because of what Mike Fiato, executive vice president and chief claims officer for Allstate, said about their review process when asked in the subcommittee hearing why it seems like claim reviews often result in lowered estimates. Fiato said company data reveals estimates are reduced about 27% of the time.
The data Fiato referenced is what Marr wants to see with respect to Request For Production #37. When Tupper asked for specifics, Marr said he wants institutional documents that could show indemnity reductions for homeowners claims, and that could be investment, cost-benefit or actuarial analysis.
“It’s our belief that this is ultimately a corporate directive,” Marr said. “Now, it may not be so explicit as to say, ‘Go out there and reduce these things to zero,’ but we do believe there are directives and incentives that read between the lines.”
Oklahoma City-based attorney Jasper Abbott, representing Encompass in the lawsuit, argued the request for discovery was too broad, vague and burdensome.
“I don’t know of any document that says, ‘Here’s a circumstance under which you reduce payments, and here’s one that says you don’t,’” Abbott said. “ … And I have to be able to say to someone, ‘Here’s specifically what they’re looking for.’ If you want to get into whether there’s a pattern of practice of indemnity reductions, I think it needs to be limited in scope to Oklahoma, Encompass or something of that nature.”
Tupper agreed that the request is broad, but said this case presents more than a “routine discovery disagreement.” He said plaintiffs have brought “pretty persuasive evidence,” including recorded communications and deposition testimony, which could support a finding that a third-party vendor estimate was modified or overridden during the handling of the Woodard claim.
The allegations, Tupper said, go “directly to the core of a bad faith claim under Oklahoma law.”
Tupper ruled the plaintiffs have made a sufficient case to justify meaningful institutional discovery into vendor estimate modification practices and related tracking data.
The defendants must produce documents sufficient to show for a five-year period preceding the 2023 loss, which includes policies, procedures, directives and training materials. They must also provide any internal guidance or expectations concerning conformity between vendor estimates and engineering reports. Additionally, the order includes production of data reports, summaries or tracking materials that reflect how often vendor estimates were reduced, how often they were increased, and the typical or average magnitude of reductions, if tracked.
The deadline for the defendant to produce the documents is March 24.
After the hearing, Marr said he’s confident the discovery will show “how widespread this is.”
Meanwhile, Marr said they are working to take the deposition of Fiato to speak on their corporate practices. He also said he and the Woodards are expected to meet with Sen. Hawley soon to discuss Allstate and Encompass.
Ultimately, Marr wants a trial.
“I don’t think it’s going to take anything more than what you saw today to convince 12 people this is wrong,” Marr said.
