Warren and Hawley Probe Insurers Over Claims Ending Without Payouts

Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) have launched an investigation into major home and auto insurers, questioning why more claims are closing without any payouts. The senators' inquiry, reported by the Wall Street Journal, targets insurers like State Farm and Allstate Corp. (NYSE:ALL), requesting data on closed claims, including denials. They also seek explanations on whether employee or adjuster compensation is tied to claim decisions or payouts.

The senators expressed concerns about consumers' trust in insurance companies, criticizing aggressive claims-handling practices aimed at boosting profits. The WSJ's analysis of regulatory filings revealed that homeowners face nearly even odds of receiving no payment, with drivers also experiencing worsening prospects for auto liability and medical claims.

U.S. property and casualty insurers reported $31.2 billion in underwriting profits for the first half of 2023, nearly triple the $10.9 billion from the previous year. AM Best attributed this surge to higher premiums and lower claim payouts. Insurers maintain they investigate all claims and pay what is owed promptly and fairly.

This investigation expands Warren's broader scrutiny of concentrated influence in insurance and healthcare. Earlier in August, she criticized vertical integration involving UnitedHealth Group Inc. (NYSE:UNH), citing potential patient cost increases and corporate profit gains.