Claims closed without payment should not be confused with claim denials, according to Triple-I in a response to a recent Wall Street Journal (WSJ) article, “The Home-Insurance Coin Flip: Nearly Half of Claims Result in Zero Payout.”
In the article, WSJ suggests that the problem of claims being closed without payment to insureds is worsening. It notes that, together, the five biggest home insurers resolved over 44% of claims without payment—up from 36% a decade earlier, according to its own analysis.
Although the article includes several factors that industry analysts and executives say are driving nonpayment rates, it suggests a bleak picture for consumers—especially with statements like, “Home insurers pitch policies as a peace-of-mind financial safety net. But customers can find the apparent guarantee of compensation for disasters evaporates when they come to claim.”
The Other Side of the Coin
Triple-I disputes the implication that the data reflect a rise in improper claim denials. In a statement prepared in response to the WSJ article, Triple-I emphasizes that “treating all claims closed without payment as evidence of insurer failure to pay covered losses creates a misleading picture of how claims are handled and resolved.”
Meanwhile, Sean Kevelighan, chief executive officer, Triple-I, tells CLM, “Claims closed without payment should not be confused with claim denials. The data analyzed by WSJ measure a broad category of claims that can be closed without payment for many legitimate reasons, including losses that fall below a policy deductible, claims that are withdrawn by policyholders, duplicate claims, inquiry-only claims, or losses that are not covered under the policy.”
Kevelighan continues, “A higher percentage of claims closed without payment does not necessarily indicate that insurers are becoming less willing to pay covered claims. In fact, insurers remain contractually obligated to pay covered losses and continue to pay millions of claims each year. The claims process and the reasons claims are closed are more nuanced than the article suggests, and it is important that consumers understand the distinction between claims closed without payment and improper claim denials.”
Triple-I’s statement also notes the importance of recognizing that claims data is not always directly comparable across insurers. “Companies may differ in how they report claims, count exposures, administer policies, and serve different customer segments,” the statement explains. “A single loss may involve multiple exposures, some of which are paid while others are closed without payment. As a result, statistics may not accurately reflect consumer outcomes or the percentage of policyholders who receive payments following covered losses.”
Several factors have influenced claim outcomes in recent years, according to Kevelighan. He notes that many homeowners have chosen higher deductibles to manage rising insurance costs, leading to an increased likelihood that losses fall below the deductible threshold and result in claims that are reported but closed without payment.
At the same time, he adds, “inflation has increased the cost of repairing and rebuilding homes, while more frequent and severe natural disasters have led to a greater volume and complexity of claims. These conditions can make the claims process more challenging for both insurers and policyholders.”
Technology, including the use of smartphones, has also made it easier for consumers to report losses and initiate claims. This includes situations where policyholders are simply seeking information about coverage. As a result, not every reported claim results in a payment, which can affect how claims data are interpreted.
Triple-I’s statement notes that, in 2024 alone, property and casualty insurers paid billions in claims caused by an estimated $112.8 billion in U.S. natural catastrophe losses. “Paying covered claims promptly and fairly remains central to the industry’s purpose and is subject to extensive regulatory oversight,” the statement emphasizes.
"The biggest misconception that will likely come from the WSJ article is that claims closed without payment are synonymous with unfair claim denials,” Kevelighan says. “They are not. A claim can be closed without payment for many legitimate reasons that have nothing to do with an insurer refusing to honor its obligations. When those distinctions are not clearly explained, consumers may incorrectly conclude that insurers are routinely denying valid claims. That interpretation is not supported by the data being analyzed.
“Consumers deserve a full understanding of what these metrics measure—and what they do not measure—before drawing conclusions about insurer behavior.”