Major Insurers Under Fire at Senate Hearing for Claims Practices
It’s not just the smaller, Florida-domiciled insurance companies making headlines these days. Big names like State Farm, Allstate, and others found themselves in the hot seat during a Senate subcommittee hearing. Why? Allegations of altered damage reports, reduced payouts, and practices that some say border on fraud. The hearing on May 13 had it all—drama, political grandstanding, emotional testimonies, and even a rare apology from an industry giant.
What’s Really Going On?
Adjusters and policyholders didn’t pull any punches. They laid bare what they described as troubling industry practices in the wake of major storms like Hurricanes Helene and Milton. It’s not a pretty picture. Reports of doctored assessments, inexperienced adjusters, and arbitrary estimate cuts dominated the testimony.
Take Jacob Vertel, a State Farm policyholder from Asheville, North Carolina. His home was battered by Hurricane Helene, and his story? Pretty shocking. According to Vertel, his initial damage estimate was slashed significantly, and the adjuster sent to his property seemed woefully unprepared. But here’s the kicker. State Farm’s operations VP, Michael Keating, stood up during the hearing, apologizing directly to the Vertels. “We’re human beings. We made mistakes,” he admitted per the Insurance Journal story, promising to make things right. A big moment—but does it really fix the underlying issues?
Allstate’s Turn in the Spotlight
Allstate didn’t get away unscathed, either. One Georgia homeowner’s tale involved a massive oak tree crashing into her house during Hurricane Helene. Her initial damage estimate of $500,000? Reduced to $46,000. After hiring a public adjuster, the company eventually settled for $100,000. But even that lowball payout became the stuff of controversy.
Allstate’s Chief Claims Officer, Mike Fiato, defended the company’s actions. “Some of what you heard today wasn’t accurate,” he argued, adding that Allstate had paid what was owed. Sen. Josh Hawley wasn’t buying it. “Your profits have never been better,” he fired back, pointing out the company’s $4.6 billion in earnings and CEO Tom Wilson’s $26 million salary. The question hung in the air: Why is there so much money for executives but not for sufficient claim payouts?
Fiato pushed back. He explained that additional cosmetic restorations weren’t covered by the policy. But when Hawley pressed him to disclose his own salary, Fiato refused. Awkward silence followed. Sound like a nail-biter? It was.
Adjusters Speak Out
Perhaps the most damning testimony came from the adjusters themselves. Nick Schroeder and Cliff Millikan, contractors for Allstate and Pilot Catastrophe Services, outlined a pattern of troubling behavior. Schroeder said he was told to blame structural damage on “settling” and to recommend repairs instead of replacements—even when roofs were clearly beyond saving. When he refused to comply, guess what? The claim was reassigned.
Millikan didn’t hold back, either. “Since 2020, Allstate’s practices have shifted,” he testified. He claimed the company increasingly relies on unskilled adjusters who simply snap photos and leave major decisions to desk reviewers. The result? Confusion for policyholders and massive reductions in payouts. “There’s no transparency,” Millikan said. “Policyholders never even meet the reviewers.”
Both adjusters described similar experiences of retaliation when standing up to these practices. Allstate, of course, denied any such actions and downplayed the testimony. Fiato claimed Schroeder’s work had rarely been altered and argued that field adjusters still hold power in the process. Still, hearing after hearing brought more allegations that echoed across the industry.
A Broader Problem?
If you thought this was just about Allstate and State Farm, think again. Whistleblowers and policyholders have pointed fingers at other insurers, too. After Hurricane Ian, companies operating in Florida faced similar accusations of altering reports to slash payouts. Independent adjusters from Louisiana and Texas have shared similar claims about post-disaster practices.
And it’s not just storms. Recently, wildfire victims in California took aim at State Farm, accusing the company of dragging claims processes and withholding payouts. Even California’s Insurance Commissioner hinted at the possibility of opening a formal investigation into the company.
This isn’t a contained issue. It’s part of a growing trust gap in the insurance industry. Critics say as extreme weather events intensify, so too does the pressure on insurers to cut costs—which often comes at the expense of homeowners.
The Big Question
Can anything be done? Senators like Hawley are calling for sweeping reforms. They want more oversight, transparency, and protections for adjusters and policyholders. Industry executives counter that these practices ensure efficiency and weed out fraudulent claims. But when adjusters, homeowners, and even lawmakers are all singing the same tune, it’s hard to ignore.
Hawley framed it bluntly during the hearing. “These companies exist so that when disaster strikes, people have somewhere to turn. But instead? They’re profiting off others’ pain.”