On April 14, 2012, an EF-3 tornado struck Woodward, Oklahoma causing six deaths, at least 29 injuries, and considerable damage to a number of homes and buildings. A tornado rated EF-3 generates speeds of 136 to 165 miles per hour. The tornado was one of dozens of twisters that touched down across the Great Plains over several days that month. The storm caught many unaware in Woodward, a town of 12,000 people, when storm sirens failed to sound after lightning apparently disabled the warning system.
The tornado caused considerable damage to the homes of Woodward residents Jeff and Mary Sharpe, Linda and Kim Louthan, and Sterling Parks. All three homes were insured with Farmers Insurance or its subsidiary Foremost Insurance Companies. The three families all ended up dealing with the same insurance adjuster when trying to get their claims paid. And, all three ended up suing Farmers for failing to properly pay insurance benefits and acting in “bad faith.”
A Woodward County judge has now found the insurance companies guilty of “bad faith” regarding their dealings with the plaintiffs in the days following the April 2012 tornado in Woodward. The judge has ordered the insurance companies to pay over $15 million to the families.
Oklahoma, like most jurisdictions in the United States, requires insurance companies to treat their policyholders in “good faith.” For example, the insurance company is obligated to act fairly and reasonably in the investigation and valuation of damaged property. Insurers may not unreasonably deny or delay a claim for policy benefits.
The lawsuit alleged that, after the April 2012 tornado here, the Farmers adjuster offered each of them far less than was needed to fix their homes. The adjuster undervalued their homes and told them the homes were not structurally damaged by the storms, even when faced with independent engineering reports to the contrary, according to the lawsuit.
The lawsuit also alleged that the insurance companies failed to pay benefits included within their policies, such as alternative living expenses and additional monies to pay a general contractor called “overhead and profit,” which allows a homeowner to pay for the expense of a general contractor.
For example, Foremost Insurance told Parks his house was not structurally damaged and it could be fixed. Like the other two plaintiffs, Parks then hired an independent engineer to examine his home. The engineer concluded the house should be torn down, not fixed.
Without the money he needed from insurance, Parks had to take out a second mortgage on his home to fix it. In the Louthan’s case, it means they are still renting a home to live in while also paying a mortgage on their home—a home they cannot insure because Farmers canceled them and the home is not repaired enough to be insured by another company. The Sharpes couldn’t afford to move. They continue to live in their home as it crumbles down around them.
Following about six days of a trial in front of District Judge Ray Dean Linder in Woodward County District Court, the judge has now ruled in the favor of the three families against their insurance companies. The three families were awarded a little over $5 million each. The insurance companies may appeal.
Trouble with your insurance company?
If you believe your insurance company is not treating you fairly, you should consult with an attorney about a potential “bad faith” lawsuit against your insurance company. The insurance company has an army of lawyers looking after its interests. It only makes sense that you have a lawyer looking after your interests.
Contact the lawyers at Heygood, Orr & Pearson for your free case evaluation and to learn more about your legal right to compensation. You can reach us by calling toll-free at 1-877-446-9001, or by filling out a free consultation form.
Case results depend upon a variety of factors unique to each case. Results of other cases do not guarantee or predict a similar result in any future case.