Insurance Claims Payouts Draw Senate Probe as Premiums Soar

A bipartisan demand for the numbers insurers rarely publish

Two senators who rarely agree on anything are asking the country's biggest home and auto insurers to explain why so many claims now end with no payment. On October 2, Elizabeth Warren, a Massachusetts Democrat, and Josh Hawley, a Missouri Republican, sent letters to State Farm, Allstate, USAA, Farmers, Liberty Mutual and American Family.6 Warren is the ranking member of the Senate Banking, Housing and Urban Affairs Committee. Hawley chairs a Homeland Security and Governmental Affairs subcommittee that oversees disaster response.9 The committee made the letters public on October 5. The companies have until October 16 to answer.2

The senators built their case on Wall Street Journal investigations. A May report found that the five largest home insurers paid nothing on more than 44% of the claims they resolved in 2025, compared with 36% a decade earlier.2 An August follow-up found that auto insurers paid nothing on 45% of the auto liability and medical claims they resolved last year, up from about 35% in 2016.7 Insurers usually don't disclose how many claims they close without payment, so the senators are asking the companies to hand over that data directly.

Rising premiums are central to the case

The letters tie claims outcomes directly to what households pay for coverage. Homeowners insurance premiums rose 70% nationally from 2019 to 2025, a figure several outlets traced to a Federal Reserve Bank of Dallas report.617 For an average homeowner with $350,000 in rebuilding coverage, premiums rose about 39% in 2025 alone, or roughly $760.5 The letters also say home insurance costs have risen three times faster than overall inflation since January 2025.8

Auto coverage has followed a similar path. According to the letters, average full-coverage premiums rose 31% from 2023 to 2025, reaching $2,638 a year, with a 12% jump in 2025.1

The senators argue that higher prices and lower odds of a payout are pushing people out of the market altogether. They cite an Insurance Information Institute study finding that 12% of Americans had no home insurance in 2024, up from 5% in 2019.2 They also cite Insurance Research Council data showing the share of uninsured drivers rising from 11.6% in 2019 to 15.4% in 2023.1 This is the core of their argument: coverage costs more and is less likely to pay, yet most people can't simply walk away from it. Mortgage lenders usually require home insurance, and nearly every state requires drivers to carry liability coverage.1

The inquiry covers property and casualty lines only. The same tension between rising premiums and denied claims has drawn criticism in health insurance, but these letters say nothing about medical coverage beyond the injury claims paid through auto policies.1

Profits are the sharpest part of the letters

The senators' most pointed line contrasts consumer pain with industry earnings. They say record profits raise the question of whether more aggressive claims handling, including delayed payments, is helping widen margins.6 The letters cite record property and casualty profits of $136 billion in 2025 and the best underwriting results in 20 years.1 They also list each company's 2025 net income: $12.9 billion for State Farm, $10.2 billion for Allstate, $6.79 billion for Liberty Mutual (up 55% from the prior year), $3.18 billion for American Family and about $1.24 billion for Farmers.7

The earnings trend continued into 2026. A rating firm reported that property and casualty insurers earned $31.2 billion in net underwriting income in the first half of the year, almost triple the $10.9 billion from a year earlier. The firm credited higher premiums and lower claim payouts. The letters also point to a Consumer Federation of America analysis estimating that home insurers collectively earn an extra $8.8 million in interest and investment income for every day they delay claims.8

The profit numbers carry the political argument, but they also show where the industry's defense is weakest. Insurers spent several years saying they were losing money on underwriting and used that to justify steep rate increases. Now that underwriting income is surging, partly because payouts are lower, it's harder to argue that today's pricing simply makes up for past losses.

What the senators are asking for

The questions are detailed. Each insurer must provide ten years of data on claims paid and claims closed without payment, broken down by peril and by reason. The categories include falling below the deductible, a policy exclusion, a formal denial, withdrawal by the policyholder and other causes.1 The senators want to know how many unpaid claims policyholders disputed and how often the company later paid or reversed itself.7 They are asking each company to estimate how much each factor contributed to the rise in unpaid claims, and to describe any major changes to claims-handling rules since 2015.8

Two requests go beyond claims counts. One asks about pay, bonus and performance-review programs for adjusters and managers that are tied to loss ratios, settlement amounts, claim severity or denial rates. The other asks about the use of artificial intelligence, predictive analytics and other automated tools in claims decisions, and the safeguards around them.4 The final question asks whether each company will publish annual claims data, the way mortgage lenders disclose lending data.1

The disclosure request matters most. As one coverage attorney put it, public claims data would let consumers compare insurers on how often they pay, how often they reverse decisions after a dispute and how fast they pay, not just on price and advertising.4 Lawmakers would also get a lasting tool from it, which a one-time letter can't provide.

How insurers are pushing back

The companies' main defense is about definitions. State Farm said it is reviewing the letters. It said a claim closed without payment does not necessarily mean coverage was denied, since claims can close when the loss is below the deductible or the customer withdraws the claim.3 A USAA spokesman said such outcomes have many causes and that the company aims to handle claims fairly, promptly and with care.13 Industry representatives also pointed to fraud, uncovered losses and rising deductibles as likely reasons more home claims end without payment.

Industry voices also disputed the Journal's methodology. They noted that the no-payment figures reported to regulators include auto claims paid by the other driver's insurer, along with claims that were withdrawn, outside policy terms or below the deductible.3 An industry spokesperson said profits should be weighed against higher repair and rebuilding costs, severe weather losses, legal system abuse and fraud, and against the need to hold capital for future catastrophes.3

Some of those points are fair, and the senators' letters admit that claims can go unpaid for legitimate reasons.7 But the deductible explanation doesn't fully clear the industry. The letters note that insurers have switched some deductibles to a percentage of a home's value instead of a fixed dollar amount, and that consumers facing higher premiums are choosing higher deductibles to save money.8 If affordability pressure is driving the rise in sub-deductible claims, the trend still reflects a market where coverage is getting thinner as prices rise, even when no individual claim was handled improperly.

Where the coverage agrees and where it diverges

Across trade, financial and general news outlets, the basic facts match: six insurers, an October 16 deadline, the 44% and 45% no-payment rates and the 70% rise in premiums.5610 The differences are in framing. Politico described the Journal's finding as policyholders being a third more likely to have a claim denied than a decade ago.9 That wording blurs the difference between a formal denial and a claim that simply closed without payment, which is exactly what insurers object to. One trade outlet wrote that the home figure was "up 36%" from a decade ago, when the share actually rose from 36% to 44%.1 Insurance trade outlets also gave far more space to industry rebuttals than general news coverage did.3

Why it is more than a letter

The inquiry doesn't stand alone. Hawley has already held a subcommittee hearing where adjusters testified they were pressured to lower estimates. Earlier this year, he pressed State Farm to pay tornado claims in full that were still unsettled a year after the storm.1 Politico framed the letters as part of growing bipartisan scrutiny of insurers amid the cost-of-living squeeze.9 In the meantime, State Farm has announced plans to add 3,000 claims workers.14

The October 16 responses will show whether the industry's explanation about deductibles and definitions holds up once the data is broken down by reason. If formal denials and exclusions account for a meaningful share of the decade-long increase, the case for mandatory claims reporting gets much stronger. If deductibles and withdrawals explain most of it, the debate shifts to affordability and how much protection a standard policy still provides. Either way, the insurers' current position is hard to sustain politically: they have record profits, premiums that keep rising and data they still decline to publish.