Insurers say many unpaid claims involve flood damage, which standard policies often exclude, or losses that fall below deductibles
Millions of Americans are facing a rising risk that their home insurance claims will not be paid out.
A Wall Street Journal analysis found that the five largest US home insurers—State Farm, Allstate, Liberty Mutual, USAA, and Farmers—closed more than 44% of claims without payment in 2024, up from 36% a decade ago.
Insurance companies say years of losses caused by severe storms, inflation, and higher repair costs have forced them to take a tougher approach to claims.
Why it’s happening
Many insurers have raised deductibles, requiring homeowners to cover a larger share of repair costs before coverage begins. Some companies have also introduced stricter standards for expensive repairs, particularly roof replacements.
Meanwhile, homeowners seeking lower premiums are increasingly choosing higher deductibles, which can leave claims below payout thresholds.
Insurance premiums are also increasing due to a combination of technological, environmental, and economic factors.
Insurers are shifting from traditional underwriting based on historical loss data to predictive risk models that estimate future exposure. At the same time, reinsurance costs have risen sharply, boosting industry expenses. These pressures are compounded by a sharp rise in costly weather-related disasters and the lingering financial effects of COVID-19, particularly from supply chain disruptions and claims-related losses.
Impact on homeowners
The trend is leaving many homeowners with unexpected repair bills after disasters. Florida recorded one of the highest nonpayment rates, with more than two in five homeowner claims closed without payment in 2024.
Insurers say many unpaid claims involve flood damage, which standard policies often exclude, or losses that fall below deductibles. Consumer advocates urge homeowners to review policy terms carefully, document damage thoroughly, and challenge claim denials they believe are unfair.