U.S. senators send letters to property insurers asking about claims closed without payment

U.S. Sens. Elizabeth Warren (D-Massachusetts) and Josh Hawley (R-Missouri) sent letters to executives of State Farm, Allstate, USAA, Farmers, Liberty Mutual, and American Family requesting information about an “unprecedented share of homeowners and auto insurance claims” that have been closed without payment to policyholders, according to a press release. 

The letters follow a May Wall Street Journal (WSJ) article that found the five largest home insurers failed to pay more than 44% of claims resolved in 2025, up 36% from a decade ago. An August report from the newspaper found car insurers failed to pay 45% of auto liability and medical claims resolved last year, up from 35% a decade ago. 

“The growing share of both homeowners and auto insurance claims resulting in no payment raises serious questions about whether consumers can trust their insurance companies to hold up their end of the bargain when disasters or emergencies occur and affect their most basic essentials: their home and car,” the senators jointly wrote. “While major insurance companies are raking in profits at record highs, a growing number of Americans are being left in financial ruin without the relief they paid for – in the wake of some of the worst moments of their lives.” 

The letters individually list the 2025 profits for each of the companies: 

• • State Farm: Earned a net income of $12.9 billion, up $7.6 billion from 2024. 
  • Allstate: Earned a net income of $10.9 billion, up $5.6 billion from 2024. 
  • USAA: Did not disclose its 2025 earnings, but the letter says “the company tripled its profits from 2023 to 2024, earning $3.9 billion.”
  • Farmers: Earned net income of $1.25 billion, more than double 2024’s ($588.6 million). 
  • Liberty Mutual: Earned net income of $6.79 billion, up 55% year over year. 
  • American Family: Earned annual net income of $3.1 billion, up 25% from 2024. 

“Homeowners are typically required to purchase home insurance as a condition of their mortgage, while nearly every state requires drivers to maintain some form of auto liability coverage,” the senators write. “Homeowners and auto insurance help cover the cost of repairing a claimholder’s car or home, replacing belongings within them if they are damaged during a disaster or accident, or even paying for medical coverage if injuries are sustained during an accident.”

Auto insurance costs have surged, with average full-coverage premiums up 31% from 2023 to 2025, reaching $2,638 per year, including a 12% increase in 2025, the letter states. 

The letter points to data from the Insurance Research Council, which found the share of uninsured drivers increased from 11.6% in 2019 to 15.4% in 2023. 

The senators say homeowners insurance premiums increased 70% nationally between 2019 and 2025; for an average homeowner with $350,000 in rebuilding coverage, premiums increased 39%, or $760, in 2025. 

“The record profits of insurance companies raise questions about whether increasingly aggressive claims-handling practices, including tactics to delay payments, are contributing to higher margins,” the letter states. “Indeed, insurance companies seem to be swimming in profits, with property and casualty insurers making a record $136 billion in 2025 and reporting the highest profitability from underwriting policies in 20 years.”

The letter requests that the insurers respond to the following by Oct. 16:

• • “Provide your company’s yearly percentage and number of claim fulfillments and claims closed without payment for homeowners and personal auto insurance over the last 10 years, including: a. disaggregated for each type of peril your homeowners and personal auto insurance policies cover; and b. disaggregated by the reason for nonpayment, including claims that fell below the applicable deductible, were subject to a policy exclusion, were formally denied, were withdrawn by the policyholder, or resulted in no payment for any other reason.
  • “For each year over the last 10 years, provide the number and percentage of homeowners and personal auto insurance claims that were initially denied or closed without payment that policyholders appealed or otherwise disputed, and the number and percentage of those claims for which your company subsequently made a payment or reversed its initial determination.
  • “Explain the primary factors that have contributed to the increase in homeowners and personal auto insurance claims being closed without payment over the past decade and quantify the extent to which each factor (e.g., deductibles, policy exclusions, withdrawn claims, formal denials, or other reasons) has contributed to this trend.
  • “Since 2015, has your company made any material changes to its homeowners or personal auto claims-handling policies, procedures, or guidelines? If so, describe those changes and the reasons for implementing them.
  • “Describe any compensation, bonus, performance evaluation, or other incentive programs for your company’s employees, contractors, adjusters, or managers involved in homeowners or personal auto claims that incorporate metrics related to claim payments, claim severity, loss ratios, settlement amounts, claims closed without payment, or denial rates.
  • “Describe your company’s use of artificial intelligence, predictive analytics, or other automated tools in the homeowners and personal auto claims process, including the safeguards in place to ensure fair and accurate claims determinations.
  • “Will your company commit to providing this Committee and the public with its annual claims data, just like mortgage lenders report their loan data to the public?”

In April, Hawley sent a letter to State Farm’s CEO demanding the insurance company stop dragging its feet and pay policyholders in full for tornado damage that had happened a year prior. 

Hawley notes that just days before the storm, a State Farm executive testified under oath before his subcommittee that the company pays its policyholders “promptly, courteously, and efficiently.” 

“It is disappointing, but not surprising, that these words were an empty promise,” Hawley said. 

During the subcommittee hearing, Hawley grilled Allstate and State Farm executives, saying testimony from adjusters and policyholders, along with previous lawsuits, appears to show the companies are “running a racket” and a “pattern of fraud” while making “outrageous profits.”  

The Homeland Security & Governmental Affairs Subcommittee on Disaster Management, District of Columbia, and Census heard from two adjusters who testified that they were pressured to lower estimates.  

In July, John Parese, a partner with Buckley, Wynne, and Parese, addressed the issue in a letter to Attorney General Pamela Bondi discussing insurance practices that harm consumers and the collision industry. The letter addressed the Senate Homeland Security and Governmental Affairs hearing.

“The unlawful practices exposed during that proceeding are virtually the same as those that occur every day with countless auto body repair claims,” the letter states. “Nearly every state auto body trade association has long advocated for greater consumer protections and for the protection of unlawful insurer practices.”

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