Oklahoma Attorney General Gentner Drummond filed a lawsuit against Allstate Corp. in Cleveland County District Court. The suit accuses the insurer of systematically underpaying or denying legitimate homeowners' claims for wind and hail damage. Drummond alleges violations of the Oklahoma Consumer Protection Act and the state's Racketeer-Influenced and Corrupt Organizations (RICO) Act.
The complaint claims Allstate used third-party engineering and adjusting firms to produce reports supporting predetermined payment minimums. It also alleges agents used deceptive sales practices to misrepresent storm damage coverage. This action follows a similar lawsuit Drummond filed against State Farm in June.
Oklahoma seeks civil penalties and the dismantling of the alleged racketeering enterprise. Separately, Keefe, Bruyette & Woods raised its Allstate price target to $255.00 from $242.00. The firm maintains a market perform rating on the stock.