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Senators Warren and Hawley probe insurers over unpaid claims
U.S. Senators Elizabeth Warren and Josh Hawley have issued formal inquiries to six major insurance companies, including State Farm, Allstate, USAA, Farmers, Liberty Mutual, and American Family Mutual. The senators are investigating a reported increase in homeowner and auto insurance claims that are closed without any payment being issued to policyholders.
The inquiry follows reports, including analysis from the Wall Street Journal, suggesting significant percentages of claims are being resolved without payouts. Specifically, one report indicated that auto insurers did not pay out on 45% of certain closed claims last year, while another suggested the five largest homeowners insurers did not pay on 44% of resolved claims.
Senators expressed concern that record industry profits might be linked to aggressive claims-handling practices designed to increase margins. In response, State Farm noted that claims may close without payment if the loss is below a customer’s deductible or if the claim is withdrawn. Industry representatives, such as the Insurance Information Institute, argued that insurers must maintain significant capital to cover future catastrophe losses and rising repair costs.
Entities
Allstate Corp. · Elizabeth Warren · Insurance Information Institute · Josh Hawley · State Farm Mutual Automobile Insurance Co.
Claims
What the coverage asserts, and how many sources carry each claim.
- [● 2 SOURCES] The senators requested data on unsuccessful homeowner and personal auto insurance claims. www.claimsjournal.com · www.troyrecord.com
- [○ 1 SOURCE] A Wall Street Journal report stated the five largest homeowners insurers did not pay on 44% of resolved claims. www.insurancejournal.com
- [● 2 SOURCES] Senators Elizabeth Warren and Josh Hawley sent letters to six major insurers on Oct. 2. www.claimsjournal.com · www.troyrecord.com
- [● 2 SOURCES] State Farm stated claims can close without payment if the amount is below a deductible or if a customer withdraws the claim. www.claimsjournal.com · www.troyrecord.com
- [○ 1 SOURCE] A Wall Street Journal analysis found auto insurers did not pay on 45% of closed auto liability and medical claims last year. www.insurancejournal.com
- [○ 1 SOURCE] The Insurance Information Institute noted that insurers must maintain capital to pay for future catastrophe losses. www.insurancejournal.com