Sens. Elizabeth Warren (D., Mass.) and Josh Hawley (R., Mo.) are launching a bipartisan investigation into how major home and auto insurers process claims, following a Wall Street Journal investigation revealing rising odds of no payout for consumers.
The senators sent letters to six of the largest insurers — including State Farm and Allstate — requesting data on claims closed without payment, including formal denials. The Journal’s analysis found homeowners face near coin-flip odds their claim will result in no payment, while drivers also face worsening chances of payout on auto liability and medical claims.
The probe focuses on whether insurers are using “increasingly aggressive claims-handling practices, including tactics to delay payments,” to boost profits. U.S. property and casualty insurers reported $31.2 billion in underwriting profits for the first half of this year, nearly triple the previous year, according to AM Best.
Insurers maintain they investigate all claims fairly and promptly, citing fraud and uncovered losses as common reasons for denials. Higher deductibles are also cited as a factor. The senators are also asking companies to disclose compensation structures tied to claim payouts for employees, contractors, and adjusters.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing