Home Insurers Often Collect When Consumers Are Safe But Retreat When Disaster Strikes

PALM BEACH GARDENS, Fla., Oct. 6, 2026 — A series of studies by Weiss Ratings reveals a troubling pattern across America’s home insurance market: Consumers are paying more for coverage that’s becoming less reliable, while insurers continue to benefit financially from premiums collected in advance.

Taken together, the findings show an industry increasingly transferring risk back to consumers precisely when they most need the protection they’ve paid for.

“Many insurers collect premiums when families are safe, retreat when families are at risk, and profit while families wait,” said Weiss Ratings founder Dr. Martin D. Weiss. “The industry has created a system in which delaying, reducing or denying payments can improve the company’s bottom line while leaving policyholders to bear the consequences.”

More Claims Closed Without Payment

In 2025, 15 large U.S. insurers closed at least half of their homeowner claims without payment. Mid-Century Insurance Company of Texas closed 78% without payment, Lemonade Insurance closed 64%, and Spinnaker Insurance closed 61%. Nationwide, the rate rose from approximately 25.7% in 2004 to 42.1% in 2024.

Why Delays Create a Perverse Financial Incentive

Among Florida homeowners who eventually received payment in 2025, 41.6% waited at least 60 days, the highest rate in the nation. Such delays can leave families displaced, unable to rebuild or living in unsafe conditions.

U.S. home insurers held $305.5 billion in invested assets and generated approximately $28.1 million in investment income per day in 2025. Weiss Ratings estimates that each additional day before claims are paid could generate approximately $9.3 million in investment income across the industry.

“This doesn’t prove that every delayed claim was intentionally held back for profit,” Weiss said. “But it does reveal a perverse incentive: The longer insurers hold policyholders’ money, the more time they have to earn income from it.”

Insurers Retreat as Risk Grows

In 2025, Utah insurers initiated nonrenewals equal to 4.45% of homeowners policies in force, approximately one in 22, which is 8.4 times the state’s rate in 2018. California ranked second at 2.93%, still 3.6 times its 2018 level.

Homeowners dropped by regular insurers may be pushed into the surplus-lines market, where coverage can cost more and carry fewer protections. In California, the surplus-lines business grew 15-fold from $85 million in homeowner premiums earned in 2018 to $1.3 billion in 2025. But over the past five years, those same insurers paid only 49 cents in claims per premium dollar, compared with nearly 71 cents paid by regular insurers.

Profits Continue While Consumer Protections Shrink

Over the 22 years beginning in 2004, U.S. home insurers have reported $10.2 billion in underwriting losses, but those losses are small compared with the $136.6 billion in investment income and profits they’ve made — mostly from premium money they’ve collected in advance from policyholders.¹

“These are just some of the tactics many insurers have used to stiff homeowners,” Weiss said. “In addition to closing so many claims without payment, delaying payment for long periods, dropping policyholders at a high rate, and gouging them with expensive surplus-lines policies, many are cutting claims to the bone, and then pushing hard for tort-reform laws to stop distressed consumers from going to court against them.”

In Florida, however, that tactic seems to have backfired. Even after sweeping tort-reform laws were passed, homeowners filed 143 lawsuits for every 1,000 claims closed without payment in 2025, up from 124 before tort reform in 2022.

Some Insurers Buck the Trend

Not all insurers produce the same outcomes. In 2025, MS Farm Bureau Casualty closed only 8% of homeowner claims without payment, Homesite Insurance closed 9%, Alfa Mutual closed 13%, Property-Owners Insurance closed 14%, and Nationwide Mutual closed 15%.

These companies demonstrate that high rates of claims closed without payment are not an unavoidable result of natural disasters, fraud, inflation or broader market conditions. Insurers can remain financially viable while producing substantially better outcomes for customers. The companies bucking this trend show that insurers have choices. Closing half or more of claims without payment is not simply the unavoidable consequence of more hurricanes, wildfires, or other disasters.

Consumers Are Never Given Some Critical Information on Their Insurers

Every year, the National Association of Insurance Commissioners (NAIC) requires the nation’s insurance companies to file a Market Conduct Annual Statement (MCAS). It collects critical information on claims delays, claims closed without payment, nonrenewals and policyholder lawsuits, but does not release the company-specific data to the public. It publishes only aggregate ratios for each state and the nation.

Separately, based on each insurer’s annual report, Weiss Ratings calculates its rate of claims closed without payment, and releases the results to the public. But without the NAIC’s company-specific data on delays, nonrenewals, lawsuits and other practices, it can be difficult for consumers to separate the best from the worst.

Weiss Ratings is calling for these records to be disclosed so consumers can compare how insurers actually treat their policyholders. “Insurance is a promise purchased long before disaster strikes,” Weiss concluded. “People deserve to know which companies are most likely to keep that promise and which have a history of failing them when they need help most.”

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About Weiss Ratings: Weiss Ratings is the nation’s leading independent provider of 100% unbiased ratings on stocks, ETFs, mutual funds, cryptocurrencies, banks, credit unions and insurance companies, covering more than 60,000 institutions and investments. Since its founding in 1971, Weiss Ratings has never accepted compensation from the companies it rates, and it never gives rated companies the opportunity to preview or suppress a rating before publication. All Weiss ratings are available at https://weissratings.com.

The U.S. Government Accountability Office (GAO) reported that the Weiss ratings of U.S. life and health insurers outperformed those of A.M. Best by 3-to-1 in warning of future financial difficulties, while also greatly outperforming those of Moody’s and Standard & Poor’s. The New York Times reported that Weiss “was the first to warn of the dangers and say so unambiguously,” and Barron’s called Weiss Ratings “the leader in identifying vulnerable companies.”

¹ Data source: Companies’ 2004 – 2025 NAIC Annual Statements, Statement of Income, column 1, rows 8 & 11. Selection criteria: P&C insurers writing $1 million or more in homeowner premium annually and representing one third of their business.