Two senators have asked six of the largest carriers to explain why a growing share of home and auto claims end with no payment. The explanation your clients will actually hear is the one you give them.
On October 2 Senators Elizabeth Warren and Josh Hawley sent letters to State Farm, Allstate, USAA, Farmers, Liberty Mutual and American Family asking for ten years of claims data. The Senate Banking Committee released the letters on October 5. The carriers have until October 16 to respond.
The trigger was reporting in the Wall Street Journal earlier this year that the largest home insurers closed more than 44 percent of the claims they resolved in 2025 without paying anything, up from 36 percent a decade ago, and that auto liability and medical claims showed a similar pattern. The senators paired that with the rise in homeowners premiums since 2019 and asked, in their words, whether consumers can trust their insurance companies to hold up their end of the bargain.
What the Senators Want to Know
The letters do not accuse anyone of anything yet. They ask. How many claims closed with no payment, broken down by peril and by the reason no payment was made. How often policyholders challenged those outcomes, and how often the carrier reversed itself. Whether adjuster pay, bonuses or performance reviews are tied to loss ratios, settlement amounts or claims closed without payment. And how artificial intelligence and predictive tools are used in the claims process, with what safeguards.
The industry response so far has been that a closed claim and a denied claim are not the same thing. The Insurance Information Institute has called the framing misleading. State Farm has said claims close without payment when the loss is under the deductible or the customer withdraws. Weiss Ratings, which has published its own analysis of the same regulator data, acknowledges the numbers would be more useful if carriers broke out why each claim closed. That is more or less what the senators are now asking for.
Why This Is Your Conversation
Your client does not read Senate letters. Your client calls you after a hail storm, files a claim, gets a letter three weeks later that says the claim is closed with no payment, and wants to know what happened. If the first time they hear the phrase percentage deductible is in that call, you have a problem that no carrier is going to solve for you.
Most zero-payment claims in personal lines come from three places. The damage came in under the deductible, which happens far more often now that wind and hail deductibles are set as a percentage of the dwelling limit instead of a flat amount. The loss fell under an exclusion or a sublimit the client did not know about. Or the client withdrew once they understood the deductible or the effect on future rates. Every one of those is a conversation that should have happened at binding, not at the claim.
What to Do With It
Go through your book and look at who carries a percentage wind and hail deductible. Translate it into dollars on the renewal call. A client who hears their deductible is two percent nods. A client who hears it is seven thousand dollars asks questions, and those questions are the whole point.
Before a client files, help them decide whether they should. A claim that closes with no payment still goes on their loss history. If the repair is close to the deductible, say so plainly, and let them choose with that information in hand.
When a claim does close with nothing, get the reason in writing from the carrier and read it with the client. Under deductible, excluded, withdrawn and denied are four different outcomes with four different next steps. If it is a denial, you know the appeal path and the state complaint process. Walk them through it. The senators are asking how often carriers reverse themselves when pushed. The honest answer is that it depends heavily on whether anyone pushes.
Finally, watch the data on your own carriers. The ratio of claims closed with payment to claims closed without is public in the regulator filings, and Weiss and others are publishing it by company. If one of your markets is an outlier, you want to know that before a client finds it in a news story.
The Trust Gap Is Yours to Fill
The senators framed this as a question of trust between policyholders and insurance companies. In practice, the policyholder does not have a relationship with the insurance company. They have one with you. Whatever the six carriers say by October 16, the client who understood their deductible before the storm, and had someone read the closing letter with them after it, is the client who renews.