For roofers, the disputes highlight a practical concern: when insurance payments are delayed, reduced, or denied, contractors may be left waiting for payment for completed work.

Construction attorney and RC Legal Insights Expert Trent Cotney says the changing insurance environment is pushing some restoration companies to rethink contracts built entirely around insurance payouts. 

"The day of having a contingency-based contract that is solely based on getting paid by insurance is numbered," said Cotney, partner with Adams & Reese. 

Oklahoma Puts Roof Claims Under the Microscope

Drummond's fight with insurers began with State Farm, which he sued in June over allegations that the carrier used undisclosed claims-handling practices to reduce roof replacement approvals and payments following wind and hail damage.

The state alleges State Farm used an internal program called The Hail Focus Initiative and restrictive standards to limit coverage despite selling homeowners replacement-cost policies. The lawsuit alleges violations of Oklahoma's Consumer Protection Act and Rackateer-Influenced and Corrupt Organizations Act, along with civil conspiracy and unjust enrichment.

State Farm disputes the allegations. 

Drummond followed up with a lawsuit against Allstate in July, alleging the insurer similarly used internal claims practices to deny or underpay legitimate wind and hail losses. The state claims Allstate restricted field adjusters' authority and relied on third-party inspectors and reviewers as part of that process. The allegations against both insurers remain unproven.

The Oklahoma Insurance Department has spent two years examining how insurers handle roof claims, Drummond said. Insurance Commissioner Glen Mulready pledged to release the findings in the first quarter of 2026, but the report had not been published when Drummond demanded it in July.

For contractors, those findings could clarify whether regulators identified broader problems in how roof claims are evaluated. Cotney believes these pressures could accelerate a change in the restoration business model. Historically, some storm contractors have used contingency-based agreements that are structured around the expectation that insurance proceeds will pay for the work. Cotney sees contractors moving toward a hybrid approach. Insurance can still cover the loss, but contractors increasingly structure agreements so the homeowners, building owners, or other end user remains responsible for paying for the work performed.

"There's a lot of nuances there, both contractually and otherwise, but I think you're seeing a change toward more of a retail strategy, even when it relates to insurance," Cotney said.

That distinction becomes more important when the contractor's estimate and the carrier's determination differ, or when payment is delayed. For contractors, it may not be just whether a project is covered by insurance, but what the contract says happens when the insurer does not pay the expected amount or does not pay on the expected timeline.

Illinois Sought State Farm Data

The scrutiny of State Farm extends beyond Oklahoma. In October 2025, Illinois Attorney General Kwame Raoul sued State Farm on behalf of the Illinois Department of Insurance to compel the Bloomington, Ill.-based insurer to provide information for a regulatory examination of its homeowners insurance business. Illinois regulators had launched the examination in 2024 amid concerns about rising insurance premiums.

According to the attorney general, the department sought detailed nationwide information, including ZIP-code-level data on premiums collected, coverage types and limits, and the number of claims. The state alleged State Farm refused to provide some of the requested information, prompting the lawsuit.

Illinois did not accuse State Farm of systematically underpaying roof claims; its dispute focused on regulators' ability to obtain information needed to examine the insurer's homeowners business. 

California Takes Aim at Wildfire Claims

State Farm is also facing a government lawsuit in California. Los Angeles County sued the insurer Aug. 31 over its handling of claims stemming from the January 2025 Eaton and Palisades wildfires.

The county alleges policyholders faced unreasonable claim delays, systematic underpayments, denials, adjuster reassignments, communication barriers, and misrepresentations during the claims process. It also alleges improper suppression of smoke-damage claims.

The lawsuit followed a County Counsel investigation that included hundreds of complaints and policyholder documents. While the California action does not concern hail and wind roof claims, it adds another example of government authorities examining how property insurers evaluate and pay claims following catastrophic losses.

Los Angeles County notes that California's Department of Insurance separately reviewed 220 randomly selected State Farm claims and reported 398 violations of the state's Unfair Insurance Practices Act and related regulations in May. 

State Farm says it strongly disagrees with the county's characterization, says it cooperated with the California Department of Insurance review, and says it had paid more than $6.2 billion in 2025 wildfire claims as of Aug. 31. 

Next Steps for Roofing Contractors

Cotney said contractors should prepare their businesses accordingly.

The changing environment does not mean insurance will disappear from storm restoration, but contractors may need to be increasingly careful about basing their payment expectations on what an insurer decides to cover. That places greater importance on contractors who clearly establish who owes the contractor, how payment will be handled, and what happens when insurance proceeds fall short or arrive late.