08/10/2026
If You Get in a Car Crash, the Risk Is Growing Your Insurance Won’t Pay - Wall Street Journal
https://www.wsj.com/finance/if-you-get-in-a-car-crash-the-risk-is-growing-your-insurance-wont-pay-1522236c
Auto insurers denied a growing share of liability and medical claims last year — 45%, up from 35% a decade ago — according to a Wall Street Journal analysis of thousands of company filings submitted to state regulators. That's despite drivers being legally required to carry insurance. Claims for auto damage (collision/comprehensive coverage) fared much better, with about 24% closed without payment, a rate that's stayed roughly flat since 2016. The steeper decline is concentrated in liability and medical claims — coverage for injuries or damage to other people when you're at fault, plus uninsured/underinsured motorist claims.
The article opens with Christopher Benton, a California man whose $5,000 liability claim for a minor fender-bender was denied by National General (owned by Allstate) because his 15-year-old son — who wasn't driving and wasn't licensed — wasn't listed on the policy application. Benton says he and his broker didn't know disclosure was required; he's now part of a class-action suit alleging the insurer intentionally designed its application to obscure that rule. The insurer denies wrongdoing.
Insurers attribute rising denials to increased fraud (including AI-assisted fake claims) and what they describe as premature litigation, with one industry group executive arguing consumers are turning to lawyers as a first resort. Plaintiff attorneys and consumer advocates push back, arguing denials are driving the litigation, not the reverse, and that insurers are tightening claims handling to protect profits — personal auto insurers paid out just 61 cents per premium dollar last year, their lowest such ratio since 2020.
Nonpayment rates vary significantly by insurer (Allstate and USAA highest among major carriers, Travelers lowest) and by state — Hawaii and California drivers were nearly twice as likely to go unpaid as Michigan drivers, which the industry attributes partly to attorney-fee caps and deductible levels. Insurers caution that "closed without payment" isn't the same as "denied," since it includes claims below the deductible, withdrawn claims, or ones covered by another driver's insurer.
The piece closes on State Farm's new crackdown on claims involving drivers not disclosed on a policy, which internal documents say costs the company nearly $1.5 billion annually — a policy expected to increase future denials.
