Auto claims closed without payment reached 45% for liability and medical cases in 2025 as industry underwriting income hit a record $68.7 billion.

Buying insurance is easy. Discovering what it will pay after a crash is where the relationship gets complicated. A Wall Street Journal analysis of regulatory filings found that auto insurers closed 45% of the liability and medical claims they resolved in 2025 without making a payment.

That was up from about 35% a decade earlier. The trend does not apply equally to every claim: roughly three-quarters of physical-damage claims resulted in payment. The numbers mark a serious shift but do not explain every closure.

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That distinction matters. So does the language. “Closed without payment” is not synonymous with “denied,” and the data alone cannot tell us that 45% of drivers were treated unfairly. It can include claims below a deductible, duplicate or withdrawn claims, losses outside the policy, cases paid by another carrier and investigations that concluded nothing was owed.

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Why claims closed without payment reached 45%

The figure covers resolved liability and medical claims, the categories that can involve injuries, treatment costs and disputes over who owes what. These claims are often more complicated than repairing an insured driver’s own vehicle. One collision can also generate several claim files, with one exposure paid and another closed for no payment.

The National Association of Insurance Commissioners’ instructions separately count claims closed with payment, without payment and without payment because the amount was below the deductible. That framework still does not answer the most important question: Why did the consumer receive nothing?

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Location adds another layer. The Journal found that drivers in Hawaii and California were almost twice as likely to see a resolved claim end without payment as drivers in Michigan. State insurance systems, litigation rules, coverage requirements and typical deductibles can affect the result. The comparison is a warning signal, not proof that insurers broke rules.

Why insurance belongs in every car-buying decision

Drivers tend to shop for a vehicle first and price the insurance later. That order is becoming increasingly risky. The exact model, trim, safety hardware, repair complexity and theft history can change the premium, while the deductible and coverage limits determine how much financial risk stays with the owner.

Policy language also matters long after the purchase. The Journal reported that State Farm added a duty to notify the company of new regular drivers to renewal policies. The insurer said undisclosed drivers cost it nearly $1.5 billion annually. A teenager, partner or relative who regularly uses the vehicle but is not properly disclosed can therefore become a serious coverage problem when a family is already dealing with a crash.

Before buying a car, obtain an insurance quote for the exact vehicle identification number or closest available configuration. Ask how the policy treats household drivers, permissive use, rideshare or delivery work, original-equipment parts, rental reimbursement and underinsured motorists. A cheap premium can be a very expensive product if the policy does not match the way the vehicle is actually used.

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Record profits sharpen the consumer question

The timing makes the no-payment trend harder to dismiss. NAIC data show the property-and-casualty industry generated a record $68.7 billion underwriting gain in 2025, up from $25.3 billion in 2024. The industry’s policyholder surplus, its financial cushion for paying future claims, reached a record $1.27 trillion.

Those totals cover more than personal auto insurance, so they should not be presented as money taken directly from accident victims. Still, the auto results were also striking. State Farm reported a $4.6 billion auto underwriting gain for 2025 after a $2.7 billion loss in 2024. Allstate reported $5.7 billion in auto underwriting income, more than triple its 2024 result.

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The Insurance Information Institute argues that a claim can close without payment for legitimate reasons and warns that different reporting practices can distort comparisons. That defense is reasonable. It is not, however, an argument for less scrutiny. When most consumers must carry coverage to drive legally, regulators should require standardized public reporting that identifies why claims close unpaid, how often consumers appeal and how often those decisions change.

What drivers can do before and after a crash

Start by reading the declarations page and exclusions before there is a loss. Confirm every regular driver, check liability limits, understand the deductible and save the policy in a place accessible from your phone. Review it at renewal because terms can change even when the insurer and vehicle stay the same.

After a crash, prioritize safety, contact police when required and document the scene with wide and close photographs. Collect witness information, save medical and towing records, report the claim promptly and keep a dated log of every conversation. Do not rely on a verbal explanation if the claim closes unpaid; request the decision in writing and ask the insurer to identify the exact policy language and evidence supporting it.

If the explanation does not make sense, use the insurer’s appeal process and submit missing documentation. Drivers can then contact their state department of insurance, which can review complaints involving delays, denials and unsatisfactory settlements. California and Hawaii maintain their own consumer complaint channels, as do other states.

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The 45% figure does not prove that nearly half of all claims were wrongfully denied. It proves something more defensible and still troubling: a growing share of liability and medical claims ends with no insurance payment, while the industry’s finances have rarely looked stronger. Consumers deserve to know why.