State Farm VP Apologizes to Homeowner, Allstate Exec Gets Grilled at Senate Hearing

It’s not just some Florida-domiciled insurance carriers that have allegedly altered field adjusters’ reports or low-balled property damage estimates in recent years. It’s also major national insurers, according to adjusters and policyholders who spoke at a recent U.S. Senate hearing marked by drama and political theater.

After hearing testimony from a State Farm policyholder in North Carolina who said his Hurricane Helene-damaged home was still unrepaired, an initial damage estimate had been greatly reduced, and a seemingly unknowledgeable adjuster was sent, State Farm’s operations vice president took the extraordinary step of apologizing during the May 13 Senate subcommittee hearing.

“We have 66,000 employees. We’re human beings. We make mistakes. We made mistakes in the handling of this claim. These actions do not reflect the values of State Farm,” said company Vice President Michael Keating, who stood up and turned to address the insured, Jacob Vertel, of Asheville.

“On behalf of State Farm, I want to sincerely apologize to Mr. and Mrs. Vertel,” Keating said, promising to resolve the claim.

But an Allstate executive at the hearing disputed some of the testimony from a Georgia policyholder and adjusters who worked her Helene claim after a massive oak tree fell on the home.

“Some of what you heard today was not accurate,” Allstate’s Mike Fiato, chief claims officer, said during the hearing of the Disaster Management Subcommittee of the Senate Committee on Homeland Security and Governmental Affairs. Fiato noted Allstate settled with the homeowners for about $100,000–something the policyholder did not reveal in her testimony.

Allstate declined to pay an additional $100,000 or more in non-structural or cosmetic restoration work, Fiato explained.

Nonetheless, Sen. Josh Hawley, R-Mo., who has indicated he plans to run for president in 2028, scarcely let Fiato answer questions.

“I have to notice that your (Allstate’s) profits have never been better. You made $4.6 billion in profits and your CEO, Tom Wilson, last year was paid $26 million,” said Hawley, chairman of the subcommittee. He asked why the policyholder could not get paid but the company CEO can. Fiato responded that Allstate had, in fact, paid the claim.

“No, you didn’t. You paid a paltry sum,” said Hawley, the former attorney general for Missouri. He went on to demand Fiato reveal his own salary, which Fiato declined to provide.

The dramatic exchange came after two adjusters, one an independent adjuster who was hired by Allstate and the other who has worked mostly for Allstate in recent years, testified that Allstate reviewers or desk adjusters had repeatedly asked them to remove line items from storm damage estimates and to mischaracterize some types of damage.

“I was instructed to attribute cracked tiles to settling, and to show that the roof should be repaired, not replaced,” said independent adjuster Nick Schroeder, who worked the claim for Pilot Catastrophe Services. The roof had widespread damage, rafters were split, and the roof structure needed replacing after the tree fell during the storm, he said.

Schroeder said an Allstate desk reviewer never visited the site but based his reduction instructions solely on photographs and cost concerns.

After Schroeder declined to change his report, Allstate sent another adjuster to the stately home in Sandy Springs, Georgia. Cliff Millikan, who previously worked with Pilot and has worked Allstate claims since 2016, said his estimates were often reduced inappropriately by company reviewers.

“Since 2020, there have been changes in Allstate’s practices that undermine policyholders and erode trust in the insurance industry,” Millikan said. Allstate has increasingly relied on unlicensed and inexperienced adjusters who do little more than take photos of damaged properties, Millikan alleged.

After Allstate’s corporate reviewers look at the photographs, wholesale changes are made to damage estimates, he noted.

“There’s no transparency,” Millikan said. “This confuses the policyholder. They’ve never had any interaction with the reviewer.” Allstate has essentially stripped qualified field adjusters of their authority to decide what damage should be considered storm-related, he said.

Millikan also testified that when adjusters resist Allstate’s instructions to reduce claims amounts, they get reassigned to another job or are avoided by the carrier.

Fiato said Allstate does not retaliate, and the company does not frequently change field adjusters’ estimates. Schroeder, for example, had turned in 15 claim-inspection reports after Helene, none of which were reviewed or altered by corporate staff.

The adjusters’ assertions echo statements made in recent years by several independent adjusters who worked hurricane claims in Florida and Louisiana.

They have said a number of insurance companies have frequently altered reports in ways that made it appear that the field adjusters had drastically reduced their own estimates.

An Allstate spokesperson declined to comment on the hearing but sent a press release. National insurance organizations took issue some of the statements made. The American Property Casualty Insurance Association noted in a news release and in a letter to Hawley that the vast majority of Helene and Milton claims have been settled, and less than 1% resulted in complaints. Many unpaid claims involved flood damage.

Topics Homeowners Politics