The Oklahoma Attorney General’s lawsuit against State Farm will eventually move beyond public accusations, press releases, and procedural skirmishing. The real battle will be over evidence. I previously noted this lawsuit in Did State Farm Win the Battle but Lose the Advantage in the Oklahoma Hail Claims War?
At the center of that evidence may be something most policyholders never see. These are the materials State Farm uses to train, manage, and motivate its adjusters, supervisors, managers, and claims executives.
The importance of those documents is not that an insurance company trains its employees. Every responsible insurer should train its adjusters. Hail damage can be difficult to distinguish from ordinary weathering, manufacturing conditions, installation problems, mechanical damage, blistering, and prior deterioration. An insurer has every right and a responsibility to all its policyholders to teach its adjusters how to tell the difference.
The question is not whether State Farm trained its people. The question is what State Farm trained them to do, why the training changed, who ordered those changes, and whether the training was designed to produce accurate claim decisions or lower claim payments regardless of what the policy promised.
Training Records Are a Roadmap and Not Yet the Destination
A recently filed exhibit in an Alabama State Farm hail damage case contains 71 pages of employee training histories. The exhibit lists hundreds of courses taken by claims employees and managers over many years. Those courses include Hail Focus composition roof damage, hail test-square instruction, roof repair versus replacement, Haag hail and wind assessment, impact testing and hail definitions, weathering and other roof anomalies, mechanical damage, unintentional mechanical damage, wind-caused damage, roof inspection methodology, roof skill reviews, monthly roof reviews, estimate reconciliation, fair claims settlement practices, and leadership sessions regarding wind and hail claims.
This is a remarkable amount of organized instruction. Those records establish that State Farm did not leave hail adjustment entirely to the individual judgment of whichever adjuster happened to climb onto the roof. It developed a structured training system addressing how roof damage should be identified, classified, documented, estimated, reviewed, and approved.
But the exhibit is mostly a list of course titles and completion dates. It does not tell us what was actually taught.
A course titled “Damage Assessment—Composition Roofs” could teach adjusters to conduct a careful, objective investigation. It could also teach them to define covered damage more narrowly than the policy allows. A course called “Hail Focus” could improve technical accuracy. It could also be part of a program designed to reduce roof replacements. The title alone does not answer the question.
The training histories are therefore not the smoking gun. They are a map showing where the evidence is buried. A decade ago, in State Farm Operation Guidelines Regarding Wind and Hail Damage to Composition Roofs, I noted that State Farm has some of the insurance industry’s most extensive training regarding hail claims.
The Actual Training Materials Matter
The important evidence will be the videos, PowerPoints, scripts, photographs, job aids, examinations, correct-answer guides, instructor notes, manager talking points, and previous versions of each course. Those materials may show how State Farm instructed adjusters to distinguish hail impacts from wear and tear. They may show whether adjusters were taught that damage must cause an immediate leak, fracture the shingle mat, create a puncture, or satisfy some internal definition of “functional damage.” They may show whether adjusters were instructed to consider a reduction in useful life, loss of integrity, repairability, matching issues, brittleness, and the cumulative effect of numerous hail impacts.
That comparison could be especially important because a prior State Farm Operation Guide stated that damage occurs when either the water-shedding ability or the life expectancy of roofing material is reduced. The same guideline recognized that hail can cause actual damage accompanied by excessive granular loss affecting the integrity and utility of the roof.
Hail damage does not always announce itself with water pouring through the ceiling. Hail may reduce the useful life and integrity of a roofing system before the first interior leak appears. If State Farm’s later training remained consistent with that principle, the materials may help its defense. If the later training silently narrowed the definition of damage, the difference between the older Operation Guide and the newer training may become some of the most consequential evidence in the case.
Why Training Evidence Matters in a Bad Faith Case
Most bad faith cases begin with one claim file. The insurer argues that the dispute arose from the particular roof, the particular storm, the particular adjuster, and the particular policy language. Sometimes that is exactly right.
One claim file does not always explain why the adjuster acted as they did. The claim file may state that the roof showed wear and tear, mechanical damage, blistering, installation problems, or no functional hail damage. It may not disclose that the adjuster was following a companywide training program, seeking mandatory managerial approval, responding to a quality review, or applying an internal definition not found anywhere in the policy.
Training evidence can connect the individual claim decision to the corporate claims system. It can establish what State Farm knew about hail damage. It can show what investigators were instructed to look for and what they were told to disregard. It can demonstrate whether an adjuster departed from the company’s own standards. It can also show whether the adjuster followed those standards precisely and whether the standards themselves were reasonable.
The repeated nature of training matters as well. One adjuster can make a mistake. An annual curriculum, mandatory refresher course, monthly roof review, management session, and companywide approval process reflect deliberate corporate choices. It makes the explanation that “one adjuster simply got it wrong” much less persuasive if the same conduct repeatedly appears across many claims.
The Alabama Discovery Fight Is a Preview
The Alabama pleadings I attach here provide a preview of the discovery disputes that are likely to occur in Oklahoma. 1
The policyholders in the Alabama case sought testimony about the development and purpose of the Wind/Hail Claims Focus Models, Wind/Hail Quality Plans, Hail Focus Initiative, Haag training, Operation Guidelines, claims manuals, jurisdictional references, financial goals, performance evaluations, roof-claim indemnity analyses, and the reported financial impact of roof claims. State Farm produced thousands of pages, including course lists, quality plans, performance materials, parts of the Operation Guide, employee evaluations, and excerpts from claim procedures. Yet, according to the policyholders’ discovery report, the underlying training videos identified from the course histories had still not been produced despite having been located by State Farm’s counsel.
This is not a minor discovery disagreement. Producing a spreadsheet showing that an employee completed “Hail Focus—Composition Roof Damage” is not the same as producing the course. A roster proves attendance. It does not prove the lesson.
The Oklahoma Attorney General will almost certainly seek the actual content, including every materially different version used during the relevant period. He will also seek communications discussing why courses were created, revised, expanded, or assigned to particular employees.
The revision history may prove as important as the final version. What was removed? What language was added? Did the examples change? Did the definition of damage change? Were field adjusters given more discretion or less? Did managerial approval requirements become more restrictive? Did the training increasingly emphasize non-covered causes while reducing discussion of covered hail damage?
Those are the questions that turn training records into evidence.
Why Corporate Testimony Is Necessary
Individual adjusters usually cannot answer those questions. An adjuster may truthfully testify that she took the training but cannot remember every slide. A supervisor may say he applied the process but did not design it. A manager may explain that the instructions came from a regional office. A regional employee may point to a central claims team. Everyone may know one small portion, while nobody accepts responsibility for the whole.
Rule 30(b)(6) corporate testimony exists to prevent the endless corporate shrug. The attached Alabama deposition notice requires State Farm to designate and prepare witnesses to testify about corporate information reasonably available to the company. The notice covers the claims organization, training, guideline revisions, Hail Focus, consultants, financial analyses, adjuster authority, compensation, quality reports, claim documentation, engineering practices, software, prior testimony, regulatory complaints, and the reasons for changes in roof-claim handling. This notice reads like a discovery blueprint for Oklahoma.
The Oklahoma Attorney General will likely ask who created Hail Focus, what was the motivation to create it, who approved it, what problem it was intended to solve, and how its success was measured. He will want to know whether success meant more accurate claim decisions, greater consistency, fewer errors, fewer customer complaints or financial success, reduced average severity, reduced payments to customers, and fewer roof replacements.
The attorney general will likely examine changes in adjuster authority. Could a field adjuster once approve a roof replacement but later needed managerial approval? Could the manager overrule the person who physically inspected the roof? Was the manager reviewing full-resolution photographs, test-square findings, tactile observations, and weather data, or merely selected photographs sent electronically?
Prior Oklahoma litigation included testimony alleging that field adjusters could not independently approve roof replacements, mark suspected hail impacts, or communicate coverage decisions without approval from higher management. Those allegations were disputed by State Farm management, which is precisely why competent corporate testimony and the underlying documents matter.
The Financial Evidence Will Follow the Training
The Attorney General alleges that State Farm implemented a Hail Focus Initiative to reduce aggregate roof indemnity payments in Oklahoma. State Farm denies that characterization and maintains that each claim is evaluated individually under the policy and the particular facts of the loss. Discovery will test both positions.
The Attorney General will likely request financial presentations, roof-loss studies, claim-severity reports, replacement rates, consultant analyses, quality dashboards, manager scorecards, and communications concerning the cost of roof claims. He will look for evidence connecting those financial concerns to changes in training, authority, inspection methods, engineering referrals, and claim outcomes.
An insurer is permitted to know what it is paying. It would be irresponsible not to track losses, trends, fraud, claim severity, and catastrophe exposure. A large insurer must maintain financial strength so it can pay covered claims after the next storm.
The problem arises only if a legitimate financial concern becomes an undisclosed claims standard. There is a vast difference between reducing claim costs by improving accuracy and reducing claim costs by making covered damage harder to recognize, approve, or document. The Oklahoma discovery will likely focus along those lines.
State Farm Is Entitled to a Fair Examination
The Oklahoma Attorney General’s complaint contains allegations, not findings. State Farm says it evaluates each claim based on the particular property, damage, policy terms, conditions, endorsements, and exclusions. It states that it paid more than $1 billion to Oklahoma customers for wind and hail damage during the preceding two years and strongly disputes broad characterizations of its claims practices. State Farm’s view and evidence deserve consideration.
The fact that State Farm paid many claims does not prove that every claim was handled properly. It also would be unfair to suggest that the existence of denied or disputed claims proves a companywide scheme. Both propositions are too simplistic.
Not every mark on a roof is hail damage. Not every old roof is entitled to replacement after a storm. Insurers should investigate prior deterioration, installation problems, manufacturing conditions, mechanical damage, and ordinary wear and tear. They should employ qualified experts when the facts warrant it. They should supervise inexperienced adjusters and maintain consistent standards.
The training and internal management materials could ultimately show that State Farm acted responsibly. They may demonstrate that Hail Focus was created to improve technical competence and prevent inconsistent decisions rather than suppress valid claims. They may show that managers were instructed to pay covered claims fully and promptly while distinguishing unrelated deterioration. But those conclusions should come from the evidence, not the title of the program or the assurances of either side.
The Larger Lesson for Insurers and Policyholders
Training materials often reveal how an insurance company actually services the product it sells. The policy tells the public what was promised. The training tells employees how the company intends to perform that promise. When those two align, the training can be compelling evidence of good faith. When they do not, the training may become Exhibit A.
That is why the Oklahoma case may become about much more than damaged shingles. It may become an examination of how corporate financial objectives travel from executive presentations, through training programs and management controls, into the decisions made on policyholders’ roofs.
The fairest outcome is complete production and knowledgeable testimony. Let the Attorney General see the training. Let State Farm explain it. Let the witnesses identify what changed and why. Then let the evidence determine whether Hail Focus was a legitimate effort to get hail claims right or a program designed primarily to pay less.
Getting the claim right requires doing the adjustment right.
Thought For The Day
“It is impossible for any organization to succeed for any length of time, unless founded upon the basic principles of absolute honesty.”
—G.J. Mecherle, Founder of State Farm
1 Plaintiff’s Notice of 30(b)(6) Deposition; State Farm Objections to 30(b)(6) Notice; Plaintiff’s Report on Discovery Dispute Resolution Efforts; List of State Farm training courses, Parker v. State Farm Fire & Cas. Co., No. 2:25-cv-00281 (N.D. Ala.).
