New Lawsuit Shows Why Insurers Need More Accountability, Not Less
FOR IMMEDIATE RELEASE
July 8, 2026
Contact: contact@insurancefairnessproject.com
New Lawsuit Shows Why Insurers Need More Accountability, Not Less
Oklahoma AG alleges Allstate ran a scheme to underpay policyholders to boost company profits.
A new lawsuit filed by the Oklahoma state attorney general yesterday against Allstate Corp reveals an alleged racketeering scheme to boost company profits by minimizing payouts to homeowners for extreme weather damage after knowingly and in bad-faith promising to provide full coverage to replace storm-damaged roofs.
According to the complaint filed, Allstate allegedly secretly imposed restrictive claims standards that predetermined outcomes, stripped licensed adjusters of authority, and relied on unlicensed reviewers to reduce payouts, all to boost corporate profits.
“The facts surfaced by this lawsuit are deeply troubling and if true demonstrate the importance of holding companies accountable for their role in accelerating a nationwide climate-driven insurance crisis,” said TJ Helmstetter, a spokesperson for the Insurance Fairness Project. “While this lawsuit was filed in Oklahoma, it speaks to national trends and the ongoing ways in which insurers are breaking their promises to consumers. As extreme weather events cause more property damage than ever before, families across the country are struggling to keep up with their premiums, but insurers are raking in record profits.”
Insurer Profits Grow While Consumers Pay More
The property and casualty insurance industry recorded its most profitable underwriting year in more than two decades in 2025, with underwriting surging to $68.7 billion, up $25.3 billion from the year before. Allstate’s profits doubled to $3.8B at the end of Q4 in 2025, from $1.9B in the same quarter the previous year.
Meanwhile, Insurify predicts home insurance prices will rise 4% in 2026 following a 12% increase in 2025. In some states, premiums surged even higher in 2025, with a 24% increase in Oklahoma.
Recent analysis from Weiss Ratings shows that 15 of the largest insurers closed more than 50% of claims in 2025 with no payout, while a separate analysis from Vanderbilt Policy Accelerator found that insurer loss ratios have declined significantly over time, meaning a smaller share of premiums are being returned to consumers through claims.
Role of Limiting Consumer Rights & Recent Legislation
The insurance industry has lobbied for state-level interventions that restrict the private right to action as a solution to the growing property insurance crisis, including in Oklahoma. However, those so-called tort “reform” measures targeted consumers' ability to hold insurers accountable rather than addressing the underlying drivers of rising premiums, including insurer claims practices, increasing extreme weather risks, and excessive insurer profits.
By making it harder for homeowners to challenge delayed, denied, or underpaid claims, these policies risk leaving families with fewer tools to fight back when insurers fail to honor their coverage obligations. A recent poll released by Climate Power and the Insurance Fairness Project affirms that Americans overwhelmingly support corporate accountability, with 86% of respondents agreeing that people should have the right to file lawsuits against insurance companies that deny, delay, or underpay claims. More than 80% of voters say elected officials in their state should do more to reduce rising insurance premiums – a finding that holds across party lines.
“This lawsuit is a reminder that making it harder for consumers to hold insurers accountable is *not* a viable solution to the insurance crisis," Helmstetter continued. “Of course, insurers want to make it harder to sue them, but there is no evidence that restricting private right of action drives down costs for consumers. In fact, studies show tort “reform” has backfired in states like Florida. Instead of pushing industry-friendly measures that make it harder for consumers, lawmakers should pursue reforms that get at the root cause of the insurance crisis and that hold insurance companies accountable when they break their end of the bargain.”
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The Insurance Fairness Project is an information hub dedicated to offering insights into the home insurance crisis, exploring its drivers and highlighting solutions alongside issue experts and community advocates.
