Home insurance claims: Big Five paid nothing on 44% in 2025

A coin flip on coverage

Homeowners have been paying more for insurance every year, and a growing share of them get nothing back when they file a claim. In late May, a Wall Street Journal analysis found that the five largest U.S. home insurers, State Farm, Allstate, Liberty Mutual, USAA and Farmers, together made no payment on more than 44% of the claims they resolved in 2025.15 A decade earlier that figure was 36%.14 The Independent's write-up described the odds as close to a coin flip.11

In early October the issue reached Congress. Senators Elizabeth Warren, a Massachusetts Democrat, and Josh Hawley, a Missouri Republican, wrote to six large home and auto insurers asking why so many claims now close with no money paid.31 The two senators rarely agree on much, and their joint letter suggests unpaid claims have become a cost-of-living issue that both parties want to be seen addressing.32

The 44% figure is real. What it measures is less clear, and that question will decide where this goes next.

What the numbers actually count

The Journal used filings that insurers submit to the National Association of Insurance Commissioners for 2016 through 2025. It divided the number of claims each insurer closed without payment in a year by the total number it closed that year.15 The paper said plainly that closing a claim without payment is not always a denial. The figure also includes losses that fell below the deductible, claims the homeowner withdrew, and damage the policy excludes.15 The paper also called the 2025 data preliminary and said the final rates will probably come in a little lower.15

The insurers have focused on that gap between "unpaid" and "denied." A USAA spokesman said the analysis left out losses below deductibles, claims customers dropped, and claims that were reopened and paid later. Counting those, he said, fewer than 6% of USAA claims were actually denied.14 Even so, the Journal reported USAA's no-payment rate at 51%, up from 49% ten years ago.15 State Farm said that "selective interpretations of data" do not accurately reflect how it treats customers.12

Both sides are right about something, and the disagreement is less sharp than it looks. Most closures probably aren't formal denials. But it makes little difference to a homeowner whether a $2,000 hail claim was rejected outright or fell under a deductible the insurer quietly raised. Either way, the homeowner pays for the repair. One claims-services firm made that point directly: the result for the policyholder is the same.17

Deductibles are the main lever

Deductibles come up again and again in the reporting. Insurers have raised them, added separate and higher deductibles for hurricanes and hail, and changed some from a fixed dollar amount to a percentage of the home's value.15 On a $400,000 house, a 2% deductible means the owner covers the first $8,000 of any loss.17 For a typical wind or hail claim, that alone can wipe out any payout.

Florida's figures for Hurricane Milton support this. Damage below the deductible was the largest single reason claims closed without payment, at about 39,200 claims. Administrative reasons accounted for about 32,000, withdrawals 15,700 and lack of customer cooperation 11,800.20 A Florida law firm that represents policyholders read the numbers differently from the industry. If losses under the deductible are the top reason for no payment, it argued, the real question is whether insurers are assessing damage too low.20

That argument shows up in court. An Oklahoma physician's contractor estimated her hail damage at $49,131. State Farm's inspector put it at about $2,000, which was below her deductible.17 She is one of hundreds of Oklahoma homeowners suing State Farm, claiming it used a narrow definition of hail damage that doesn't appear in the policy.15 State Farm declined to comment on her case.15

The industry's defenders don't deny that insurers have tightened up. They say it was needed. Ann Frohman, a former Nebraska insurance commissioner, told the Journal that policies had been used as "a home-maintenance program" that paid for roof replacements after minor damage.15

Paying more, collecting less

The nonpayment figures are hard for insurers to defend because they come while premiums are rising. Warren and Hawley's letters cite a 70% national increase in homeowners premiums from 2019 to 2025, and a 39% jump in 2025 alone, about $760, for a typical homeowner with $350,000 in rebuilding coverage.31 Insurify projects that the average premium will rise another 4% in 2026, to about $3,057. That would make 2026 the fifth straight year of increases.8

Trackers measure the increases differently but agree on the direction. NerdWallet found that premiums on a typical home were 24% higher in early 2026 than three years earlier, with the Midwest hit hardest.5 Its data showed increases slowing to 4.6% over the most recent year.5 Matic reported that renewal increases fell to an average of 10.6% in the first half of 2026, compared with 19.4% in 2025 and 28% in 2024.9 The broad pattern is that premiums are still climbing but more slowly, which leaves households at a much higher cost level than before.

Insurers give several reasons for the increases: weather disasters, rebuilding costs, and reinsurance. According to LexisNexis data reported by Insurify, the average cost per claim rose almost 26% in 2025 to a record, while the number of claims fell by almost 24%.2 A Treasury report cited by U.S. News found that disasters costing more than $1 billion were five times as frequent in 2018 through 2022 as in the 1980s.14

The senators pointed to industry profits instead. Their letters say property and casualty insurers made a record $136 billion in 2025, with their best underwriting results in 20 years.34 They list 2025 net income of $12.9 billion for State Farm and $10.2 billion for Allstate.36 Industry underwriting income for the first half of 2026 was $31.2 billion, close to three times the figure a year earlier. A rating firm attributed the gain to higher premiums and lower claim payouts.37

The trade group NAMIC offered a counterweight. Insurers closed 7.35 million homeowners claims with payment in 2024, and from 1990 through 2024 the homeowners line returned an average of 2.9% on net worth, compared with 7.7% for property and casualty insurance overall.19 In NAMIC's view, those long-run returns undercut the idea that insurers profit by refusing claims.19 It's a fair point about the long run. It does less to explain the most recent year, when profits rose sharply at the same time payouts became less likely.

Penalties for filing, and people dropping coverage

The reporting also shows a further cost for homeowners. In many states, a claim that pays nothing can still lead to a rate increase or a nonrenewal. Only a few states, including Texas, prohibit that.14 The Oklahoma physician said she had paid State Farm about $10,000 a year and was dropped after her roof claim, even though it paid nothing.15 NerdWallet found that a single weather claim raises quotes by about 10.2% nationally.5

That creates an incentive to stay quiet. Homeowners learn not to report small losses, insurers see fewer claims, and coverage becomes something people own but hesitate to use. Some are giving it up entirely. The senators cite an Insurance Information Institute study finding that 12% of Americans had no home insurance in 2024, up from 5% in 2019.31

The health insurance comparison

Home insurance isn't the only coverage getting more expensive. KFF found that employer family health premiums reached $26,993 in 2025, up 6%.21 Aon reported that workers' total health costs rose 7.9% in 2026, the fastest increase in ten years.24 On the ACA marketplace, insurers have proposed a median 15% increase for 2027. That would be the second straight year of double-digit hikes after enhanced subsidies expired.24

The two markets are responding to cost pressure in similar ways. KFF warned that employers may push more costs onto workers through higher deductibles and cost sharing.21 That is the same approach home insurers have taken. In both markets, the policy stays in force while the share of each loss the customer pays keeps growing.

What comes next

The senators asked for ten years of claims data, broken down by peril and by the reason no payment was made: below the deductible, an exclusion, a formal denial, or a withdrawal.34 They also asked how many disputed claims were later paid, whether adjusters' pay or bonuses are tied to denial rates or loss ratios, and how insurers use AI in claims decisions.34 The responses were due October 16. The letters say nothing about whether the answers will be made public or what happens if a company doesn't respond.35

The most important request may be the last one: that insurers publish claims data every year, the way mortgage lenders report lending data.35 That would answer the question the 44% figure can't answer by itself. It would show how much of the trend comes from deductibles, how much from exclusions, and how much from insurers deciding to pay less. Insurers' main objection to the Journal's analysis is that the public numbers lack context, and they are the ones who hold that context. If they want the 44% figure read more charitably, they can release the breakdown.

Until they do, homeowners should treat their deductible and exclusions as the main facts about their policy. The coverage limit doesn't matter if the deductible absorbs the loss. Smaller insurers such as Erie paid out on a larger share of claims than they did a decade ago, which suggests the rising nonpayment rates at the biggest carriers come from business decisions, not something the whole industry was forced into.1316