$8.8 Million a Day: How Delayed Insurance Claims Fuel Industry Profits

Every single day that home insurance claims sit unresolved, the insurance industry collects an extra $8.8 million in interest and investment income, according to an analysis by Weiss Ratings for the Consumer Federation of America.

That finding, spotlighted by the Chicago Sun-Times, reframes the insurance claims delay profit question from a consumer nuisance into a structural business incentive. The analysis examined premiums taken in alongside investment income earned while claims sit unpaid. As the Chicago Sun-Times investigation reveals, the longer a check stays in the mail room, the more money accumulates for insurers, and the longer you wait for what you are owed. According to the Save Max Quote Index, drawn from 3.3 million+ real quote requests, consumers in high-complaint states consistently pay more while receiving slower service, a pattern that aligns directly with the findings below.

The $8.8 million-a-day math behind delayed insurance claims

The mechanism is straightforward, even if its scale is staggering.

Insurance companies collect premiums upfront. They invest those premiums in bonds, equities, and other instruments. When a claim comes in, the insurer is technically obligated to pay, but every day it waits, it earns returns on money that should already be in your pocket.

Warren Buffett, former CEO of Berkshire Hathaway, famously called this "the float." Douglas Heller, director of insurance at the Consumer Federation of America, says that float creates a "perverse incentive" for insurers to drag their feet on settlements.

Heller notes that over time, the money insurers take in for premiums and spend on claims and administration is roughly one-to-one. The profit engine is not the underwriting spread. It is the investment income earned while your claim waits.

That is not a rounding error. At $8.8 million per day on home insurance claims alone, a one-week delay across the industry generates more than $61 million in additional investment income. The analysis by Weiss Ratings, conducted for the nonprofit Consumer Federation of America, makes the arithmetic impossible to ignore.

The proposed fix, at least from Heller's perspective, is simple: make delays expensive for insurers. If companies had to pay consumers interest on delayed claims, the financial incentive to stall would shrink considerably.

How auto and property claims compare in the delay profit equation

The home insurance figure gets the most attention, but it tells only part of the story.

When Weiss Ratings expanded the analysis across all lines of property and casualty insurance, including home, auto, business, and other coverage, the per-day investment income gain rises to a combined $52.3 million. That is nearly six times the home-only figure.

The table below places these numbers side by side for clarity.

The gap between those two figures reflects how enormous the auto and commercial segments are relative to homeowners coverage alone. Auto insurance, in particular, involves millions of active policies across every state, and claim disputes ranging from minor fender-benders to complex multi-party crashes.

For drivers in states like Illinois, Michigan, and New Jersey, where urban density and litigation frequency drive up claim volume, the compounding effect of investment income on delayed payouts is proportionally larger. The structural incentive does not disappear because your claim is small.

Illinois emerges as a case study in slow settlements

Illinois puts a human face on the national numbers.

According to data from the National Association of Insurance Commissioners cited by the Consumer Federation of America, approximately 21.7% of home insurance claims in Illinois in 2024 took 60 or more days to settle. More than one in five claims crossed the two-month threshold before resolution.

That statistic deserves to sit alone for a moment.

McHenry County resident Stacie Barger lived that reality. Her 2015 Buick Encore was totaled on March 1, 2025, when a driver pulled out of a side road off Illinois Route 134 and collided with her vehicle. What followed was a 17-month ordeal with an auto insurance claim.

Barger's own insurer, Farmers, moved quickly. "They had that within about 10 days," she said, referring to the payment on the totaled vehicle. The delay came from the other driver's insurer, First Chicago Insurance.

A lawyer for First Chicago said Monday it was sending Barger $5,000 as her portion of the settlement. Roughly half of that amount will go back to Farmers.

First Chicago is a nonstandard insurer, meaning it covers drivers who do not qualify for policies with more well-known carriers. In a 2024 Sun-Times analysis of consumer complaints to the Illinois Department of Insurance, First Chicago had the highest complaint ratio of all auto insurers in Illinois.

If you are shopping for Illinois auto insurance and considering nonstandard carriers, complaint ratios from state regulators are a critical data point, not a footnote.

When complexity is real, and when it is a delay tactic

Patrick Hincks, First Chicago's outside corporate counsel, offered a detailed explanation for why Barger's case took as long as it did.

"Because this matter involved multiple injured parties with one being a minor, you have to settle with all the parties ... and as the injuries often exceed the policy limits, that adds another layer of complexity, as you can see you have to deal with the other insurance companies medical liens for amounts that they have paid as well. This is not a typical case and the duration is due to all these other factors," Hincks wrote in an email.

The facts support some of that complexity. Barger had three passengers. One required surgery for a hand injury. Another was seen in a hospital emergency department. Barger herself had chiropractor bills. Multiple parties, a minor claimant, policy-limits questions, and medical liens from other insurers all genuinely complicate timelines.

But Barger's frustration is equally real.

"It's just so ridiculous," she said. "I'm so over this."

The honest answer is that both things can be true simultaneously. Some claims are genuinely complicated and take time for legitimate reasons. Others sit in queues while investment income accumulates and no one picks up the phone. The consumer's challenge is that from the outside, the two situations look identical.

Heller's point about the "perverse incentive" is most dangerous precisely when complexity provides cover. A multi-party claim with a minor claimant is a legitimate reason for extra time. It is also, structurally, a situation where the insurer benefits financially from every additional week of delay.

What regulators and advocates say should change

Heller has put forward a specific reform proposal: a 30-day limit for insurers to pay the depreciated value of what was lost. After that deadline, negotiations on remaining amounts could continue, but the initial payment could not be withheld.

"Don't keep the check in your mail room an extra day or two," he said.

The interest-penalty concept is the enforcement mechanism. If an insurer misses the 30-day depreciated-value window, it would owe the consumer interest on the delayed amount. That flips the financial logic: instead of profiting from delay, the insurer faces a cost.

The industry coalition, a joint statement from the Illinois Insurance Association, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies, pushed back firmly. The groups argued the Weiss Ratings analysis "oversimplifies a complex claims handling process to score political points."

They added that investment income "is part of the financial model that allows insurers to keep premiums stable over time and maintain the capital needed to pay current and future claims."

That is a legitimate structural point. Insurers do rely on investment income to backstop future obligations. But it does not directly address why individual claims sit unresolved for 60, 90, or 500 days, or why the financial incentive runs in the direction of slower rather than faster payment.

The SMQI consistently shows that quote volume spikes in states with high complaint rates, suggesting consumers are actively shopping away from carriers with slow settlement records, even when rate differences are modest.

What this means for you

Document everything from day one: photographs, police reports, medical records, and every communication with your insurer. If your claim approaches 30 days without a depreciated-value payment, send a written request for a status update and keep a timestamped record. Check your state's Department of Insurance website for required response timelines, because most states mandate acknowledgment within a specific window. If delays persist, filing a formal complaint with your state regulator, as the NAIC data and the Illinois Department of Insurance records above demonstrate, creates a paper trail that can accelerate resolution.

FAQ

About Kyle Greenwood

Kyle Greenwood is a Writer and Researcher at Save Max Auto with a decade of consumer-content experience. He specializes in explainers, longer-form features, and Q&A guides on the topics auto drivers actually search for. Read more from Kyle Greenwood →

Edited by Brooke Grissom.

Methodology

This article is grounded in the source linked above. Save Max Auto data points referenced here are drawn from the Save Max Quote Index (SMQI), a proprietary instrument reflecting 3,364,317 real consumer quote requests submitted to savemaxauto.com. State and carrier rankings reflect the lifetime dataset; year-over-year shifts reflect a rolling 12-month window. The index is refreshed monthly. External authority figures referenced (NAIC, NHTSA, state regulators) reflect the most recent public data releases available at time of writing.

Sources

• Primary source: Chicago Sun-Times, "Insurance industry makes millions each day claims go unpaid, analysis shows"
• National Association of Insurance Commissioners (NAIC)