USAA closed 51% of home insurance claims without making a payment in 2025

The percentage of home insurance claims closed without payment by USAA increased again last year, mirroring a years-long trend for the San Antonio company and other big insurers.

About 51% of all claims to United Services Automobile Association and three affiliate insurers were unpaid in 2025 — one of the highest rates among U.S. insurers — according to annual reports filed with the National Association of Insurance Commissioners. 

Denials have been an ongoing issue for the companies, and the data show the rate of nonpayment has been inching up for years. In 2010, the rejection rate was less than 38% for three of the four USAA companies. A decade ago, from 46% to 47.4% of the four companies’ claims were unpaid.

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In a statement, USAA said the association’s data is misleading because it lacks context about why a claim may be closed without payment. Those factors could include claims that were later reopened, claims covered under separate policies or multiple claims from a single event that are consolidated into one case.

“When all factors are included, less than 6% of USAA homeowner claims were denied without payment,” USAA said. “Most claims closed without payment involve losses below a member’s deductible or claims the homeowner chooses not to pursue.”

The company issued a similar statement in early 2025, when the association’s data showed the USAA companies had closed nearly 50% of claims without payment in 2023.

The data suggest the percentage of unpaid claims is increasing among the nation’s largest insurers, and that the trend has accelerated in recent years. 

There are multiple possible reasons. Insurers are trying to control expenses stemming from more frequent and severe natural disasters. That may lead companies to crack down on claims, increase deductibles on risks such as hurricanes and hail, and raise rates. Then, as rates jump, some homeowners have shifted to policies with higher deductibles to keep rates lower, increasing the number of claims that fall below their deductible.

Ware Wendell, executive director of Texas Watch, a nonprofit organization that advocates for insurance policyholders, called increased nonpayment across the industry “very concerning.”

“We’re paying more and more for less and less coverage, and then fewer and fewer claims are being paid at all,” he said. “This isn’t working for consumers, but it’s working really well for for-profit, private insurance companies.”

The more claims insurance companies deny, Wendell said, the more premium revenue they are able to retain. 

“We need to make big reforms,” he said. “We can’t keep going like this. People can’t suffer those losses.”

Weiss Ratings, a Florida-based insurance company rating agency, said its calculations based on the National Association of Insurance Commissioners data show that since 2012, three of USAA’s four companies — USAA Casualty, USAA General Indemnity and Garrison Property and Casualty — have reported the exact same rate of closed claims without payment even as their numbers of claims differ.

Gavin Magor, research director for Weiss, said the near-perfect alignment for so many years “is extremely difficult to attribute to coincidence or standard shared services.” Rather, it suggests USAA could be applying “centralized top-down targets or uniform algorithms.”

RELATED: USAA insurance companies’ denial rate on homeowners claims under scrutiny

“Even with shared infrastructure, each entity serves distinct risk pools, uses different policy forms in many cases, and operates under varying state regulatory environments,” Magor said. “Simply having different volumes of insured exposure should produce meaningful variation in key percentages.”

The insurance companies’ loss ratios, or the share of premium dollars an insurer uses to cover claims, also were essentially the same from 2021 through 2025. That compounds concerns that the filings may not be genuine reflections of individual company experience.

“It’s very curious that the exact same numbers show up across any number of USAA companies and groups, and I think that it definitely bears investigation by the Texas Department of Insurance,” Wendell said.

Insurers are regulated at the state level rather than by the federal government. The Texas Department of Insurance’s financial analysts review each filing from Texas companies and verify them through financial exams, underwriting filings and complaint data. The state agency declined to comment on data related to USAA.  

“We expect companies to settle claims according to the requirements of the policy and the law,” an agency spokesperson said. “Consumers can file complaints with TDI if they’re unhappy with how a claim was handled or paid. If we see a pattern of issues with a company, we can refer the issue to our Enforcement Division for possible disciplinary action and sanctions.”

State law changes

It’s become more difficult for Texas consumers to fight insurers’ decisions to close a claim without payment.

 In 2017, the state passed the “Blue Tarp Bill” (House Bill 1774), which tightened rules on how insurers handle property damage claims, especially claims for roof damage after storms. The nickname comes from homeowners left with blue tarps on damaged roofs while claims are delayed, underpaid or denied. 

“There are now all these hurdles for homeowners to clear when they have a weather-related claim,” Wendell said.

READ MORE: USAA says it had strong 2025, but report to members drops key data

As climate change increases the incidence and severity of natural disasters, insurance companies’ rates of claim rejections are drawing closer scrutiny from outside the regulatory structure.

Vanderbilt University released a report in May suggesting that property insurers are charging far more than needed and that consumers and businesses across the U.S. are overpaying by about $150 billion a year.

In 2024, U.S. property insurance premiums topped $1 trillion. The report’s authors asserted that premiums are rising faster than the cost of claims, and that insurers are invoking climate change to justify the disparity.

Profits across the national insurance industry nearly doubled in 2024 to $166 billion and stayed high in the first part of 2025, according to the report. Companies are spending more on advertising, commissions, executive pay, jets, dividends and stock buybacks.

Last year, former USAA CEO Wayne Peacock received $14.1 million in total compensation from five USAA insurance companies for working slightly more than a quarter of 2025 before his retirement. That was a 47% increase from the $9.6 million he received in salaries and bonuses in 2024. Other executives at USAA also received pay boosts in 2025.

“We want companies to make sure they have money to pay legitimate claims but if they’re over-reserving that money, then that’s money that should be coming back to consumers in the form of lower rates,” Wendell said.

USAA has reported that its members received about $3.7 billion through distributions, dividends, and bank rebates and rewards in 2025. That was up 68% from the previous year’s $2.2 billion. In Texas, USAA returned roughly $230 million in insurance dividends to about 1.2 million members, putting an average of $190 back in each member’s pocket, the company said.

Wendell said homeowners should be calling on lawmakers for reform.

“The laws have been tilted in favor of the insurance companies,” he said. “They have less incentive to pay these claims on time and in full, and the data reflects that. … We as consumers are fish in a barrel, and we have to make sure our regulators and state lawmakers are stepping up and protecting us.”