Hawley grills insurance executives about cutting disaster payouts

Sen. Josh Hawley (R-Mo.), the chair of the Senate Homeland Security subcommittee that oversees disaster management, vented his frustration Tuesday at a hearing where he grilled the executives of two major insurance companies about cutting hurricane- and other disaster-related payments.

"In the last year alone, disasters have devastated communities across our country," he said, noting that tornadoes left thousands of people without power and damaged homes in his home state while wildfires and hurricanes wiped out homes in California and Florida in the past year.

"We're talking about moms who have had to haul 5-gallon buckets of water because the pipes are gone. We're talking about grandparents who have had to sleep in their cars because there's no roof over their heads. We're talking about families who are maxing out their credit cards because their insurance companies won't pay out any damage claims," Hawley said in his opening statement.

The Missouri senator held Tuesday's hearing to investigate insurance companies that have allegedly cut payouts to families who suffered major property damage because of recent hurricanes.

His panel heard testimony from executives from Allstate and State Farm, as well as from whistleblowers and homeowners.

Hawley noted in his opening statement that Americans are required by law to purchase homeowners insurance.

"They pay their premiums dutifully in every state in the union. And unfortunately time after time they find when disaster strikes, in their moment of utmost need, the insurance companies come back to them and they delay and they deny and they offer excuses," he said.

Natalia Migal, a homeowner from Georgia, testified about her frustrating experience with Allstate after a 70-foot oak tree fell onto her home's roof, collapsing it.

She said that her insurance company replaced her first claims adjuster after that person confirmed that her family suffered a "significant loss."

Migal testified that Allstate said the first adjuster assigned to the case was taking too long and then assigned another adjuster who conducted a second inspection that "significantly downplayed" the damage. The second adjuster said that only half of Migal's roof needed to be repaired.

"We received Allstate's initial evaluation of $46,000 and we were stunned. This amount did not begin to reflect the real-world cost of the repairs and estimates from the contractors. It was perfectly clear that working with Allstate will be increasingly difficult," the witness testified.

She said she hired an independent inspector and a structural engineer who reported that her home suffered extensive damage, and she later submitted a sworn proof of loss claiming $497,000 in damages.

But Allstate rejected that claim and offered to pay less than $100,000 to cover the damages, even though the third adjuster it assigned to the case didn't disagree with the claim that the home had suffered extensive damage, Migal testified.

Mike Fiato, the vice president and chief claims officer at Allstate, later responded to Migal's testimony.

"Some of what you heard in the first panel is just not accurate," he testified.

Fiato told senators that Allstate covered all of the structural repairs to Migal's home and said the difference in the varying estimates was due to claims of cosmetic damages.

"Allstate provided for all remediation under the policy," he said. "Roughly 70 percent of the difference in estimates was attributable not to structural damage, which Allstate covered in full, but to cosmetic damage, such as the appearance of undamaged bricks."

He said that Migal ultimately settled her claim at $100,000 and declared that "Allstate pays claims with precision and fairness."

He noted that the insurance business is subject to extensive oversight from state insurance commissioners.

Hawley asked if Fiato had any regrets about how Allstate handled the homeowner's claims.

"So you think Allstate handled it just fine?" Hawley asked.

Fiato then told Migal, who was sitting in the hearing room, that he wanted to make sure his team would work to resolve her claim satisfactorily.

At that point, Hawley suggested that Allstate change its motto from "Our customers' worst day needs to be our best" to "Our customers' worst day is our big profit opportunity."

"We've just heard testimony here, sworn testimony from multiple adjusters, that your company ordered them to delete or alter damage estimates to reduce payouts and to make you profits. It sounds to me like you're running a system of institutionalized fraud," Hawley said.

Fiato insisted: "That's not what we do."

Hawley pointed out to the sworn testimony from an adjuster who worked for Allstate for years who was repeatedly ordered to change factual findings and alter reports to drive down insurance awards.

The senator then pointed out that Allstate made $4.6 billion in profits and its CEO Tom Wilson collected $26 million in executive compensation in 2024.

"Ms. Migal can't get her claim paid out, but Tom Wilson, whoever the heck he is, gets $26 million. That's really extraordinary," Hawley said with an exasperated tone.