US senators probe insurers over rising rate of unpaid auto and home claims
Two U.S. senators have sent bipartisan letters to six major insurers including State Farm and Allstate, investigating allegations that 44% of home claims and 45% of auto liability/medical claims were resolved without payment to policyholders last year. The inquiry follows reports indicating a significant increase in such unpaid claims.
By Isha Marathe Oct 5 (The Insurer) — Two US senators have written to State Farm, Allstate, Liberty Mutual, USAA, Farmers and American Family in a bipartisan probe into alleged failure to pay 44% of the insurers' home claims that resolved in 2025. Massachusetts Senator Elizabeth Warren, a Democratic ranking member of the Senate Banking, Housing and Urban Affairs Committee, and Missouri Senator Josh Hawley, a Republican, expressed "serious concerns that an unprecedented share of homeowners and auto insurance claims are being closed without any payment to policyholders," according to the letter.
Allstate, Liberty Mutual, Farmers and American Family did not immediately respond to requests for comment. "Each claim is evaluated based on the facts and the coverage purchased, and when a loss is covered, we pay the benefits available under the policy," a State Farm spokesperson told The Insurer in a statement, underscoring the use of technology to streamline claims payment. "A claim being 'closed without payment' does not necessarily mean coverage was denied. " The senators' inquiry stemmed from The Wall Street Journal's reporting finding that the risk of a claim leading to no payment is up from 36% 10 years ago.
Subsequent reporting then suggested a similar trend in auto insurance; their letter to insurance executives said, “auto insurers didn’t pay out on 45% of auto liability and medical claims they resolved last year,” up from approximately 35% in 2016. While claims may be closed without payment for a variety of reasons, the sharp increase in claims resulting in no payment raises questions about changes in insurers’ coverage and claims-handling practices, the senators said. They alleged that the unfavorable terms for policyholders in part come from insurers' coverage changes that shift more risk onto policyholders.
“At the same time as more home and auto insurance claims go unpaid, consumers are paying substantially more for both forms of coverage,” the senators wrote, saying that insurance companies "seem to be swimming in profits," with P&C insurers making a record $136 billion in 2025 and reporting the highest profitability from underwriting policies in 20 years. “Homeowners insurance premiums rose 70% nationally from 2019 to 2025. ” As such, the senators are asking the six insurers for the companies’ yearly percentage and number of claim fulfillments and claims closed without payment for homeowners and personal auto insurance over the last 10 years by October 16. "