Home Insurers Pocket $8.8 Million a Day in Investment Income When Claims Are Delayed, Analysis Finds

Home insurance exists for the moments when things go wrong. A fire, a flood or a damaged roof can leave a homeowner facing tens of thousands of dollars in repairs, and a policy is meant to soften that financial blow.

But while homeowners wait for the money, insurers can continue earning investment income on funds they have not yet paid out — and a new analysis puts a number on just how much.

Research from the Consumer Federation of America, a consumer advocacy organization, and Weiss Ratings, an independent insurance ratings firm, estimates that home insurers collectively generate roughly $8.8 million in additional investment income for every day that claim payments are delayed. A one-week delay could translate to about $61.6 million in investment income across the industry. For households already dealing with a disaster, every extra day can make an expensive situation that much harder to recover from.

That earning power is a structural feature of the insurance business: premiums are collected up front and claims are paid later, so there is always a stretch of time in which money not yet paid out can be invested and generate returns. What the new analysis adds is a dollar figure for what each additional day of that interval is worth across the industry.

Financing a disaster

Home insurers reject the idea that they deliberately drag out claims to make money. But even without intentional delays, getting paid after a major loss can take far longer than many homeowners expect.

Jennifer Taylor, a public adjuster — a claims professional who represents policyholders rather than insurers — and the founder and CEO of Claim Ready, said the timeline varies widely depending on the size and complexity of the damage.

"A smaller, straightforward homeowners claim can usually be resolved within a few weeks to a few months," Taylor told Moneywise. "With a large loss, I regularly see the entire claim and recovery process take 18 to 24 months."

Part of the reason is that filing a claim is only the first step. A major loss can involve multiple rounds of inspections, paperwork, repairs and approvals before a homeowner sees the process through.

"You have the initial inspections and documentation, but then you also have the rebuild itself. As construction progresses, there can be additional inspections, including local building inspections, before work can move forward," she said.

Claims of that scale are far from unusual. About one in 18 insured U.S. homes files a claim each year, according to the Insurance Information Institute, with wind and hail causing the largest share of losses, followed by water damage and freezing.

Insurers have also been contending with heavier claim loads in recent years. U.S. property claims volume jumped 36% in 2024, according to Verisk data, driven largely by a 113% surge in catastrophe claims. Much of that added volume involves exactly the category of loss — large, disaster-driven damage — that Taylor says produces the longest timelines.

The cost of waiting

Even if insurers are juggling a growing number of claims, the financial pressure of waiting ultimately falls on homeowners.

That pressure can be sharpened by what coverage already costs. The average U.S. homeowner pays about $2,844 a year for a policy with $300,000 in dwelling coverage, according to Insurify, although premiums vary widely depending on location, coverage limits and insurer.

When a payout does not arrive quickly, homeowners may have little choice but to cover the costs themselves in the meantime. Taylor said some must dip into savings or turn to credit cards to pay for repairs, temporary housing and other expenses.

Delays can also make the original damage more expensive. A relatively minor roof leak, for example, can spread into walls, ceilings and insulation if water continues to get in, potentially leading to mold and leaving homeowners on the hook for urgent repairs before their claim is resolved.

"You can lose financial progress you've spent years building, and there is also the lost interest or growth on the savings you've had to use," she said.

Melanie Musson, an insurance and finance expert at Clearsurance.com, said homeowners may have little choice but to pay for urgent repairs themselves, especially if the damage has made their home unsafe or impossible to live in. That makes it important to stay involved in the claims process rather than assume it is moving along behind the scenes.

"The saying 'the squeaky wheel gets the oil' applies to homeowners making a claim. If things aren't happening, reach out to the insurer," she told Moneywise. "Don't assume that they're prioritizing your claim and will contact you when you need to do something or provide something."

How homeowners can keep a claim moving

The best time to prepare for an insurance claim is before one is ever needed. Taylor recommends keeping a home inventory with photos, receipts and appraisals for valuable items, and letting the insurer know about major renovations. Having that paperwork ready can make it much easier to show what was owned — and what was lost — after disaster strikes.

If a claim is already underway, documentation becomes even more important.

"You are your best advocate unless you have hired a professional advocate to represent you," Taylor said.

And if the process seems to stall, homeowners should not hesitate to push for answers. Taylor recommends starting with the insurance agent and, if necessary, escalating the claim to a manager at the insurance company. Homeowners who still are not getting answers can also file a complaint with their state's department of insurance or insurance commissioner — an escalation route that exists because insurance in the United States is regulated primarily at the state level, which puts claims-handling practices under state regulators' oversight.

With U.S. property claim volume up sharply in 2024 and catastrophe claims more than doubled, thorough documentation and persistent follow-up remain the main levers homeowners control while the rest of the claims process runs on timelines set by the scale of the damage, inspection schedules and insurer workloads.

This article originally appeared on Moneywise.com under the title "Home insurers pocket $8.8M a day in investment income when claims are delayed, new analysis finds." This article provides information only and should not be construed as advice.