Insurance Claims Closed Without Payment: Warren and Hawley Give Six Insurers Until October 16

Senators Elizabeth Warren and Josh Hawley have given six of the largest US home and auto insurers until October 16, 2026 to explain the rising number of insurance claims closed without payment, asking for ten years of data, the reasons behind each non-payment, and how adjuster pay and artificial intelligence feed into claim decisions. The inquiry rests on Wall Street Journal analyses showing that 44% of resolved home claims and 45% of auto liability and medical claims closed in 2025 with nothing paid. The auto figure covers the third-party injury claims that personal injury firms handle every day.

The letters are dated October 2, 2026 and went to State Farm, Allstate, USAA, Farmers, Liberty Mutual and American Family. The Senate Banking Committee's minority office published them on October 5. Industry trade groups answered within a day. They argue the "closed without payment" metric is being misread as a denial rate, and that point will shape what the data shows if the companies hand it over.

Why are Senators Warren and Hawley investigating home and auto insurers?

The senators say a growing share of policyholders and claimants get nothing when they file, even as premiums climb. Warren, the ranking Democrat on the Senate Committee on Banking, Housing, and Urban Affairs, and Hawley, a Missouri Republican who has led Senate scrutiny of disaster claims handling since 2025, wrote that the trend "raises serious questions" about whether consumers can trust their insurers. Their release cites a Federal Reserve Bank of Dallas finding that homeowners premiums rose about 70% nationally between 2019 and 2025. The letters also ask whether increasingly aggressive claims handling, including tactics that delay payment, is adding to insurer margins during a period of record industry profits.

The letters build directly on two Wall Street Journal investigations. In May, the Journal reported that the five largest home insurers closed more than 44% of the claims they resolved in 2025 without making a payment, up from 36% a decade earlier. In August, a second analysis of filings submitted to state regulators through the National Association of Insurance Commissioners found the same pattern in auto insurance, concentrated in liability and medical claims.

Which insurance companies received the Warren-Hawley letters?

Six carriers received individually addressed letters, each signed by both senators on October 2, 2026:

• State Farm
• Allstate
• USAA
• Farmers Insurance Group
• Liberty Mutual
• American Family

Together these companies write a large share of US personal auto and homeowners coverage. That makes them the defendants, or the carriers behind the defendants, in a large share of the country's motor vehicle negligence and first-party property cases. Allstate's letter is addressed to chair and CEO Tom Wilson. State Farm's was signed the same day.

What percentage of insurance claims are closed without payment?

On the figures the senators rely on, about 44% of resolved homeowners claims at the five largest home insurers and 45% of resolved auto liability and medical claims closed without payment in 2025. Collision and comprehensive claims, the coverage that pays to fix the policyholder's own car, closed without payment at a rate just under 25%. That rate has barely moved in ten years. The increase is concentrated in bodily injury, medical payments and personal injury protection lines, where claims cost more and are more likely to involve a lawyer.

Line or carrier	Closed without payment, about 2016	Closed without payment, 2025
Homeowners, five largest insurers combined	36%	44%+
Auto liability and medical, industry (WSJ sample)	~35%	45%
Auto collision and comprehensive	just under 25%	just under 25%
Liberty Mutual, auto liability and medical	29%	54%
Allstate, auto liability and medical	46%	54%
State Farm, auto liability and medical	26%	47%
Progressive, auto liability and medical	35%	46%
Farmers, auto liability and medical	19%	39%

The per-carrier auto figures come from a Journal graphic reported by Repairer Driven News and other trade outlets. Of the ten largest auto insurers the Journal reviewed, Farmers, Liberty Mutual and State Farm showed the biggest increases. Two cautions apply. The analysis counted only claims that had closed, so 2025 rates will probably fall somewhat as long-running claims resolve. And regulators let insurers define a "claim" differently, which makes carrier-to-carrier comparisons imprecise.

The trend is not new to state regulators. In Florida, a 2024 Weiss Ratings review found that the state-backed Citizens Property Insurance Corporation closed about half of its 2023 claims without payment. Citizens attributed that rate to flood exclusions, high deductibles and claims filed after policies changed hands.

What information do the senators want, and when is it due?

The senators asked each insurer to respond by October 16, 2026. The requests fall into four groups:

Request	What the letters ask for
Claims outcomes	Annual figures for the past ten years on homeowners and personal auto claims paid and closed without payment, by number and percentage, broken down by peril
Reasons for non-payment	The reason each unpaid claim closed: below the deductible, a policy exclusion, a formal denial, or withdrawal by the policyholder
Disputes and reversals	How often policyholders challenged a non-payment, and how often the insurer later reversed itself or paid
Incentives and process	Compensation, bonus or performance programs for employees, contractors, adjusters or managers that use claim payments, severity, loss ratios, settlement amounts, closed-without-payment counts or denial rates; use of artificial intelligence, predictive analytics and automated tools, with safeguards; material changes to claims-handling policy over the decade

The breakdown by reason matters most. Insurers do not publish formal denials separately from deductible, withdrawal and duplicate closures. Splitting them out is the only way to test the companies' main defense, which is that the headline number overstates actual refusals to pay.

Does "closed without payment" mean the claim was denied?

No. A claim closed without payment is not necessarily a denial, and the insurers and their trade groups made that point first. A claim can close with no money paid because the loss fell below the deductible, the peril was excluded (flood under a standard homeowners policy is the usual example), the policyholder withdrew it, it duplicated another claim, the documentation was never completed, or another driver's carrier paid. State Farm told reporters that a claim being "closed without payment" does not necessarily mean coverage was denied. USAA said such closures stem from a range of circumstances.

The metric still matters. Claimant-side lawyers point out that a lowball offer that a claimant declines, or a claim that goes quiet after an adjuster's request for records, can also end up in the closed-without-payment column. Chip Merlin's Property Insurance Coverage Law Blog put it this way: the statistics do not prove wrongdoing, but the requested data could show whether the rise comes from higher deductibles or from more formal denials, and whether many denied claims are later paid after the policyholder pushes back. The disputes-and-reversals request is aimed at that question.

How have insurers responded on insurance claims closed without payment?

The industry response has three parts: definitions, timing and profitability.

• Definitions. The National Association of Mutual Insurance Companies (NAMIC) said the Journal's methodology counted every way a claim can end. That includes losses under the deductible, flood losses outside the policy, withdrawn and duplicate claims, and files missing key documents. NAMIC said insurers closed 7.35 million homeowners claims with payment in 2024.
• Timing. NAMIC chief executive Neil Alldredge noted that the analysis excluded claims still open at year-end, a limitation the Journal acknowledged. The most recent year's no-payment rate will therefore drift down as complex claims resolve.
• Profitability. NAMIC said homeowners insurance earned an average return on net worth of 2.9% from 1990 through 2024, against 7.7% for property and casualty insurance overall. It argues the line is too thin-margined to support a theory of profit through denial. The Insurance Information Institute (Triple-I) said insurer results should be read in light of several years of elevated catastrophe losses and rising repair costs. It also cautioned against comparing carriers' rates directly because reporting conventions differ.

Consumer advocates disagree. Douglas Heller of the Consumer Federation of America told the Journal that the industry "uses claim lowballing and denials to wring extra profit out of customers who don't have the resources or, in some states, the rights to fight back." Allstate's property-liability chief summed up the carrier view in the Journal's reporting: "We have to pay what we owe, not a dollar more."

Why are auto liability and medical claims going unpaid more often?

Insurers point to fraud, litigation and claimant-side intermediaries, while critics point to tighter claims controls. The Journal found that liability and medical claims cost more and are far more likely to involve an attorney before they close, and that is where the rising no-payment rate sits. A State Farm spokesman said the factors behind its rates included higher deductibles and claims from third parties such as public adjusters and "advertising-driven attorneys." Carriers have also cited fraud, including claims supported by AI-fabricated documents.

The plaintiffs' bar reads the same numbers differently. Claimant-side lawyers argue that more bodily injury claims closing at zero reflects carriers refusing to pay pre-suit on soft-tissue and disputed-causation claims, leaving represented claimants to file suit to get paid. If that reading is right, a rising closed-without-payment rate would go hand in hand with more litigation, not less. It is the mirror image of the industry's own complaints about legal system abuse. The insurer-side campaign against plaintiffs' firms is covered in our report on RICO lawsuits against personal injury lawyers. The October 16 production, if it arrives, could show which explanation the data supports, because it separates formal denials from other closures by peril.

Timeline: Hawley and Warren's claims-handling oversight

Date	Event
May 13, 2025	Hawley chairs a Senate Homeland Security subcommittee hearing on disaster claims; Allstate adjusters and a State Farm whistleblower testify they were pressed to reduce Hurricane Helene estimates
April 15, 2026	Hawley writes to State Farm CEO Jon Farney demanding full payment of 2025 Missouri tornado claims, citing State Farm's $12.9 billion 2025 net income
May 2026	Wall Street Journal reports the five largest home insurers closed 44%+ of 2025 resolved claims without payment
August 2026	Journal reports 45% of auto liability and medical claims closed without payment
October 2, 2026	Warren and Hawley sign letters to six insurers
October 5, 2026	Senate Banking minority office publishes the letters
October 6-7, 2026	NAMIC, Triple-I, State Farm and USAA respond publicly
October 16, 2026	Response deadline

What can the letters actually compel?

Nothing directly. The letters are requests for information from a ranking minority member and a senator who does not chair the Banking Committee, so they carry no subpoena power and set no binding deadline. Companies usually respond to bipartisan oversight letters, often with narrative answers and limited data. Whether they produce carrier-level, peril-level, reason-coded statistics is the open question. Insurance is regulated mainly by the states under the McCarran-Ferguson Act, so any enforcement would come from state insurance departments through market conduct examinations and unfair claims settlement practices statutes, not from Congress.

The inquiry can still have effects. Data a carrier gives the Senate, or publicly discloses in response, can be cited in later rate proceedings, state legislative hearings and litigation. The bipartisan pairing of Warren and Hawley also makes this inquiry harder to dismiss as partisan than most single-party oversight letters.

What it means for personal injury firms, policyholder counsel and insurers

For personal injury firms. The 45% auto liability and medical figure covers the claims that make up most PI caseloads. Firms with large motor vehicle dockets can expect more pre-suit claims to close at zero and more cases to need a filed complaint before a carrier engages. That affects case-acceptance models, Contingency Fee economics and the time it takes to resolve a Medical Lien. Firms that track their own pre-suit outcomes by carrier will be able to test, against their own files, whatever the six companies report.

For bad-faith and coverage counsel. Questions about compensation and AI are already standard topics in first-party and third-party bad-faith discovery. A carrier's own description to the Senate of adjuster incentives tied to "claims closed without payment" or "denial rates" would be a natural exhibit, or at least a starting point for document requests. The first-party side of that litigation is illustrated by the Ramaco v. Chubb Hayseeds verdict.

For insurers and defense counsel. The industry's best answer is a reason-coded breakdown showing that deductibles, withdrawals and excluded perils account for most of the increase. Carriers that cannot produce that breakdown risk letting the headline percentage stand unchallenged in jury rooms and statehouses. Answers about AI use will also be read against the state-level push for rules on algorithmic claims decisions.

For litigation funders and mass tort firms. Longer pre-suit cycles and more filed cases mean capital stays tied up longer per case. Any shift in carrier claims practice feeds into Third-Party Litigation Funding pricing on auto portfolios.

FAQ

Why are Senators Warren and Hawley investigating insurers?

They want to know why a growing share of homeowners and auto claims closes with no payment while premiums have risen about 70% since 2019, and whether adjuster incentives, AI tools or delay tactics are behind it.

Which insurers got the letters?

State Farm, Allstate, USAA, Farmers Insurance Group, Liberty Mutual and American Family each received a letter dated October 2, 2026.

What percentage of insurance claims are closed without payment?

About 44% of resolved homeowners claims at the five largest home insurers and 45% of auto liability and medical claims closed without payment in 2025, according to Wall Street Journal analyses the senators cite.

Does closed without payment mean denied?

Not necessarily. Claims also close without payment when the loss is below the deductible, the peril is excluded, the claim is withdrawn or duplicated, or another carrier pays. The senators asked insurers to separate formal denials from those other reasons.

When do the insurers have to respond?

The letters request responses by October 16, 2026. They are not subpoenas, so the deadline is not enforceable, but large carriers usually answer bipartisan oversight letters.

Does the Senate inquiry affect personal injury claims?

Yes, indirectly. The auto figure covers bodily injury and medical claims, so any data the carriers release on denials, reversals and adjuster incentives bears on how third-party injury claims are valued, litigated and argued in bad-faith cases.