blog
By: Ross Karsnitz and Lauren Crawford
Americans are paying more for home and auto insurance. At the same time, a growing percentage of claims are reportedly being closed without insurers paying anything. This combination has drawn the attention of the United States Congress.
U.S. Senators Elizabeth Warren and Josh Hawley recently opened a bipartisan inquiry into the claims practices of six major insurers: State Farm, Allstate, USAA, Farmers, Liberty Mutual, and American Family. The senators are seeking 10 years of data on homeowners and personal auto claims, including how often claims were closed without payment, why they were not paid, whether claims-handling practices have changed, and how insurers use artificial intelligence and predictive analytics in the claims process.
The numbers prompting the inquiry are significant. According to information cited by the senators, 44% of homeowners claims resolved by five of the largest insurers in 2025 resulted in no payment, compared with 36% a decade earlier. For auto liability and medical claims, the share reported as ending without payment increased from about 35% in 2016 to 45% in 2025.
Those figures do not mean that every unpaid claim was improperly denied. A claim can close without payment because the loss falls below a deductible, the policy does not cover the loss, or the policyholder withdraws the claim. Insurers have emphasized those explanations in responding to the congressional inquiry.
The trend nevertheless raises an important question for Delaware policyholders.
Delaware law provides important protection in some insurance disputes. However, that protection does not extend equally to every type of claim.
Ordinarily, parties to a lawsuit pay their own attorney’s fees unless a contract, statute, or recognized legal exception provides otherwise.
Delaware has created such an exception for certain property insurance disputes.
Under 18 Del. C. § 4102, when a court renders judgment against an insurer under a qualifying policy of property insurance, the court “shall allow” the plaintiff a reasonable amount for attorney’s fees as part of the costs.
The Delaware Insurance Code defines property insurance in 18 Del. C. § 904 as insurance protecting real or personal property against loss or damage, including certain losses resulting from that damage.
The practical effect can be significant.
If an insurer refuses to pay a covered property claim and the insured must file suit and obtain a judgment to recover what the policy required the insurer to pay, § 4102 can require the insurer to bear a reasonable amount of the insured’s attorney’s fees.
Delaware courts have recognized that the statute serves a purpose beyond simply determining who pays litigation expenses. In applying § 4102, Delaware courts have explained that the provision is intended to discourage unreasonable insurer conduct.
Insurance policies do not always fit neatly into a single category.
An automobile policy, for example, can cover damage to a vehicle as well as bodily injuries. Delaware insurance law expressly recognizes that insurance coverage can fall within more than one statutory classification.
Delaware courts have therefore looked at the specific coverage at issue.
In Galiotti v. Travelers Indemnity Co., and later cases interpreting it, Delaware courts recognized that an automobile insurance policy can provide property insurance to the extent it protects against loss or damage to the insured vehicle. A policy’s inclusion within the broader category of automobile or casualty insurance does not necessarily prevent a particular property-damage coverage from qualifying as property insurance.
The reverse is also important.
The presence of property coverage somewhere in an automobile policy does not transform every dispute under that policy into a property-insurance case. In Habbart v. Liberty Mutual Fire Insurance Co., the Superior Court rejected a request for fees under § 4102 where the judgment arose from PIP coverage rather than the policy’s property-insurance component.
In other words, the coverage being disputed can affect not only what an insurer owes, but also whether Delaware’s statutory fee-shifting protection applies.
The contrast matters most when an insurance dispute involves compensation for bodily injuries rather than property damage.
Section 4102 specifically applies to property insurance as defined by § 904. Delaware separately classifies insurance against legal liability for death or bodily injury as casualty insurance.
As a result, an injured person seeking compensation for physical injuries does not receive the same general statutory right under § 4102 to recover attorney’s fees simply because an insurer refused to pay the claim and litigation became necessary.
Consider what that can mean after a serious collision.
An insurer may dispute what it owes for damage to a vehicle. It may also dispute what it owes to the far greater consequences of the same crash: medical treatment, lost income, physical pain, permanent impairment, and the effect of the injuries on the person’s life.
Yet Delaware’s statutory fee-shifting protection does not necessarily treat those two disputes the same way.
The congressional inquiry does not establish that insurers are improperly denying claims. Warren and Hawley have asked insurers for additional information because the available numbers do not explain why every claim ended without payment.
The financial context has intensified the scrutiny.
The senators cited substantial increases in insurer profitability while questioning whether changes in claims-handling practices could be contributing to those results. They also cited a 70% national increase in homeowners insurance premiums between 2019 and 2025. The property and casualty insurance industry, meanwhile, reportedly generated record profits in 2025.
Insurance industry representatives dispute the suggestion that higher profits and unpaid claims demonstrate improper claims handling. They point to deductibles, uncovered losses, rising repair and rebuilding costs, catastrophe losses, fraud, and other factors that can affect both claims outcomes and insurer finances.
Those competing explanations are exactly why the data Congress requested could be useful.
The senators have asked the six insurers to explain not merely how many claims ended without payment, but why, along with information about changes in claims procedures, employee incentives, and the use of AI and predictive analytics. Responses are due October 16, 2026.
For Delaware policyholders, the larger issue is already clear: an insurance company’s decision not to pay does not necessarily end the analysis.
Policy language, the reason for the denial, the type of coverage involved, and Delaware insurance law can all affect what happens next. In some property-insurance cases, Delaware law goes a step further by recognizing that policyholders who are forced to obtain a judgment against their insurer should not necessarily have to absorb the full cost of getting the coverage they were entitled to receive.
For more information or to discuss your claim, contact us online or call 302.655.2599.
U.S. Senators Elizabeth Warren and Josh Hawley recently opened a bipartisan inquiry into the claims practices of six major insurers: State Farm, Allstate, USAA, Farmers, Liberty Mutual, and American Family. The senators are seeking 10 years of data on homeowners and personal auto claims, including how often claims were closed without payment, why they were not paid, whether claims-handling practices have changed, and how insurers use artificial intelligence and predictive analytics in the claims process.
