Insurance Claim Denied? What Senators' Probe of Home and Auto Insurers Means for You

On October 5, 2026, Senators Elizabeth Warren and Josh Hawley sent letters to six of the largest U.S. home and auto insurers demanding answers about a sharp rise in insurance claims that are closed without payment. For anyone who pays for homeowners insurance or car insurance, the news is a reminder that having a policy is not the same as being paid. Here is what the senators said, what it means for your premiums and claims, and exactly what to do if your insurance claim is denied or underpaid.

What the senators are asking

The letters went to State Farm, Allstate, USAA, Farmers, Liberty Mutual and American Family. According to the Senate Banking Committee announcement, the senators cited these figures:

• Home insurance: insurers did not pay on over 44% of claims resolved in 2025, up from about 36% a decade earlier.
• Auto insurance: insurers did not pay on about 45% of auto liability and medical claims last year, up from about 35% ten years earlier.
• Premiums: homeowners insurance premiums rose about 70% nationally between 2019 and 2025, even as payouts on claims declined.

The senators asked the companies to provide information by October 16, 2026. The letters are a request for information, not a finding of wrongdoing, and insurers have not been shown to have broken any rule by closing claims without payment. A claim can close without payment for legitimate reasons, such as damage below the deductible, a loss that the policy does not cover, a duplicate claim or a claim the customer withdrew. But the trend has raised questions about whether customers are getting what they paid for.

Home and auto claims closed without payment have risen over the last decade, according to the senators' letters.

Why this matters for your insurance premiums

Home and auto insurance costs have climbed for several years, driven by higher repair and rebuilding costs, more severe weather, litigation and reinsurance expenses. Many households now pay far more for homeowners insurance than they did in 2019, and some have seen their policies non-renewed in higher-risk areas. If you are paying more for coverage and also face a harder time getting claims paid, the real value of your policy shrinks. That is why understanding your coverage before a loss is so important.

Common reasons a claim is denied or paid less than expected

• The cause of loss is excluded. Standard homeowners policies exclude flooding, earthquakes and wear and tear, and slow leaks are often treated differently from sudden ones.
• The damage is below your deductible. Higher deductibles, including separate percentage-based wind or hail deductibles, can leave a claim with no payment.
• Depreciation. If you have actual cash value coverage instead of replacement cost, the payout is reduced for age and condition, which is particularly significant for roofs.
• Disputed repair estimates. The insurer's adjuster may estimate lower costs than your contractor or body shop.
• Late notice or missing documentation. Policies have deadlines and proof requirements.
• Coverage limits. Sublimits for jewelry, electronics or other items can cap what you receive.
• Policy lapse or misstatements. A missed payment or an error on the application can create problems.
• At-fault disputes in auto claims, where the insurer and other parties disagree about who caused the accident.

What to do if your insurance claim is denied

A first denial is not necessarily the final word. Many denials and low offers can be challenged. Use this checklist:

Six steps to take if your homeowners or auto insurance claim is denied or underpaid.

1. Get the denial in writing. Ask the insurer to explain the exact policy provision it relied on. Insurers are generally required to give a reason.
2. Read your policy. Compare the denial with the actual wording of your coverage, exclusions, endorsements and the declarations page.
3. Document everything. Keep photos, videos, receipts, repair estimates, emails and a log of every call with names, dates and claim numbers.
4. Get an independent estimate. A licensed contractor, roofer, engineer or body shop can provide a competing estimate or evidence that the damage was caused by a covered event.
5. Request your claim file. In many states you can ask for the adjuster's report and supporting documents.
6. Appeal in writing. Most insurers have an internal appeal or reconsideration process. Submit your evidence and a clear explanation, and keep a copy.
7. Contact your state insurance department. You can file a complaint, which often prompts a response from the insurer. Departments also track complaint patterns.
8. Consider professional help. For large losses, a public adjuster (who typically works for a percentage of the settlement) or an insurance attorney may be worth the cost. Check licensing and fees first.
9. Watch the deadlines. Policies and state laws set time limits for appeals, disputes and lawsuits, sometimes as short as one year after the loss.

How to protect yourself before you need to file a claim

• Know what your policy covers. Review exclusions and ask your agent about flood, sewer backup, earthquake and water damage coverage.
• Choose replacement cost coverage for your home and belongings where available, and make sure your dwelling limit reflects the true cost to rebuild.
• Check your deductibles, especially separate wind, hail or hurricane deductibles.
• Create a home inventory with photos, receipts and serial numbers, stored in the cloud.
• Keep your roof and home maintained and document improvements, which can help both coverage and pricing.
• Compare insurers on claims service, not only price. Check complaint data from your state insurance department and independent ratings.
• Shop your policy every year and ask about discounts, bundling and higher-deductible options that you can afford.

Should you file small claims?

Filing a claim can affect your future rates or renewal in some situations, and a claim that is closed without payment may still appear in claims databases in some cases. For small losses close to your deductible, many homeowners and drivers decide to pay out of pocket. Ask your agent how claims are recorded and how a claim could affect your premium before you file, but do not delay reporting a significant loss, because late notice can itself cause a denial.

What happens next

The insurers' responses are due October 16. Depending on what the companies say, the letters could lead to further congressional scrutiny, and state insurance regulators may take their own interest in claims-handling practices. In the meantime, the responsibility for protecting your coverage falls mostly on you: understand your policy, document losses carefully and push back when a claim decision does not seem right.

Frequently asked questions

Why are insurance claims being denied more often?

There is no single cause. Senators point to the increase in claims closed without payment, and insurers cite factors such as exclusions, deductibles, claims below the threshold and rising costs. The data do not by themselves show improper denials, which is why the senators are asking for more information.

What should I do if my homeowners insurance claim is denied?

Request the denial in writing, compare it with your policy, gather evidence and independent estimates, appeal with your insurer and contact your state insurance department if the issue is not resolved.

Can I sue my insurance company?

In some cases, yes, particularly if an insurer breaches the contract or acts in bad faith, but there are strict deadlines and the rules vary by state. Talk to a licensed insurance attorney.

Do I need a public adjuster?

Not for every claim. They can be useful for large or complex losses, but they charge a percentage of the settlement, so compare the likely benefit against the cost and verify their license.

Will my premiums go down if claims are paid less often?

Not necessarily. Premiums reflect many factors, including repair costs, weather losses and reinsurance prices, and they have continued to rise even as the share of claims paid has fallen, according to the senators' letters.

Bottom line

With home and auto premiums up sharply and more claims closing without a payment, it pays to read your policy carefully before a loss and to fight back documentation-first after one. Keep records, get independent estimates, appeal in writing and use your state insurance department as a resource. A denial is not always the end of the road.

Sources

• U.S. Senate Banking Committee: Warren, Hawley press home and auto insurers on surge in claims resolved without payment (Oct 5, 2026)

This article is general education and not insurance or legal advice. Policies, claim rights and deadlines vary by insurer and state; consult your policy, your state insurance department or a licensed professional.