Why Car Insurance Companies Deny Claims: Inside the 45% That Close Without a Payment

Car insurance companies are paying out on fewer injury claims than they used to. A Wall Street Journal analysis of insurers’ regulatory filings found that 45 percent of the auto liability and medical claims resolved in 2025 closed without a payment, up from about 35 percent in 2016. The most common reasons are disputes over fault, challenges to your medical care, and coverage problems. Car repairs aren’t included in that figure, only injury and medical claims.

If you were injured in an accident and your car insurance claim was denied, cut, or met with weeks of silence, that isn’t the last word. If you want to understand what’s happening and what you can do next, the team at Armada Law Injury Attorneys can guide you through your options.

Understanding What the 45% Actually Counts

Every year, insurers report their claims to state regulators through the National Association of Insurance Commissioners (NAIC). The Journal compared the liability and medical claims that closed with and without a payment from 2016 to 2025.

Under the NAIC’s reporting instructions, a claim closed without payment is one where no money went to the insured or to the other person. Each person and each coverage is counted separately, and the count includes claims with no policy in force and claims below the deductible. Insurers told the Journal it also includes claims another company paid and claims people withdrew.

The Insurance Information Institute says claims closed without payment “are not synonymous with denied claims.” However, collision and comprehensive claims stayed near one in four over the same ten years, while the injury share climbed 10 points.

How Often Do the Biggest Insurers Close Claims Without Paying?

The 45 percent isn’t the same at every insurance company. Some of the largest insurers roughly doubled the share of injury and medical claims they closed without payment, while others barely moved. The ones with the largest increases include Liberty Mutual and State Farm.

Here’s the share of liability and medical claims each insurer closed without a payment, based on the Journal’s review of NAIC filings:

Insurers Made More Money While Paying Fewer Claims

Premiums climbed fast over the same period. Insurance Information Institute figures show that auto liability premiums rose 11.6 percent in 2023 and 11.7 percent in 2024, the two largest increases in ten years of data.

Meanwhile, the Journal found that personal auto insurers paid about 61 cents in claims for every dollar of premium in 2025. State Farm lost $2.7 billion on its auto policies in 2024 and made $4.6 billion on them in 2025, then declared a $5 billion dividend for its auto customers.

Jess Merten, who leads Allstate’s property-liability business, told the Journal, “We have to pay what we owe, not a dollar more.”

Insurers’ costs are rising too. The average injury claim grew from $17,014 in 2015 to $28,278 in 2024, and in 2022 auto insurers spent more on claims and expenses than they collected in premiums.

Insurers Blame Lawyers But Consumer Advocates Blame Profit

A State Farm spokesman told the Journal that no-payment rates reflect higher deductibles and claims from third parties, such as public adjusters and “advertising-driven attorneys.” Sean Kevelighan, chief executive of the Insurance Information Institute, said people are “going to litigation as a first step, instead of a last resort.”

Consumer advocates read the same numbers differently. Douglas Heller of the Consumer Federation of America said the industry uses “claim low balling and denials to wring extra profit out of customers who don’t have the resources or, in some states, the rights to fight back.”

Both sides agree on one point: more injury claims are being tested instead of paid on the first ask. When it comes to the right to fight back, South Carolina gives you less against the other driver’s insurance company than against your own.

Many people reach out to our firm because they're worried about being lowballed by the insurance company and want someone in their corner from the start. On the flip side, we also hear from several people who have already been denied, offered far less than they expected, or spent weeks waiting for answers. By the time they call us, they're often frustrated and overwhelmed, and they just want someone to listen, help them understand their options, and make sure their concerns are taken seriously. Anslee Woznick, Personal Injury Attorney

The Four Reasons Injury Claims Get Denied Most Often

If a car insurance company denied your claim, it was most likely for one of these reasons:

• They say you were at fault. The other driver’s insurance company decides its customer wasn’t mostly to blame or takes a percentage off your claim. In South Carolina, you can’t recover anything if you’re more than 50 percent at fault.
• They question your medical care. The adjuster argues that your injury is old, that you waited too long to see a doctor, or that the treatment wasn’t needed.
• There’s a problem with the other driver’s policy. The driver wasn’t listed on the policy, was using the car for paid work, or let the coverage lapse. State Farm told the Journal that claims involving unlisted drivers cost it nearly $1.5 billion a year.
• There’s no policy to pay your claim. About 10.3 percent of South Carolina drivers were uninsured in 2023. Many drivers also have policies that aren’t enough to cover your bills. In both cases, the claim moves to your own uninsured or underinsured motorist coverage.

We often see insurance companies question who was at fault, which is why it's so important to stay calm and stick to the facts if you're asked to give a recorded statement. Those statements can be used when the insurance company evaluates who was responsible for the accident. Gaps in medical treatment can also raise questions, but there are ways to address them. The key it to just be honest from the get go with your attorney. However, having clear medical documentation over time is really important because it helps establish the connection between your injuries and the accident. Anslee Woznick, Personal Injury Attorney

Why the Other Driver’s Insurance Company Can Say No So Easily

In South Carolina, the other driver’s insurance company doesn’t owe you a duty of good faith. That duty runs only to its own customer.

S.C. Code § 38-59-20 attempts to protect people with insurance claims from improper claim practices, including failing to respond promptly and not attempting a fair settlement when fault is reasonably clear. However, it applies only when an insurer does these things without just cause and often enough to be a general business practice. You also can’t sue the other driver’s insurance company under it; enforcement is up to the Department of Insurance.

That means a denial from the other driver’s insurance company is an opening position, not a ruling. The insurance company usually changes its answer when your claim is backed by strong evidence but it is not always guaranteed.

Your Own Insurance Company Owes You More Than That

Your own insurance company does owe you a duty of good faith. When you make a claim on your own policy, such as uninsured or underinsured motorist coverage, medical payments coverage, or collision, the company has to treat your claim fairly and pay what the policy covers.

Under S.C. Code § 38-59-40, if your insurance company refuses to pay a covered claim within 90 days after you demand payment, and a trial judge finds the refusal was without reasonable cause or in bad faith, the company has to pay your reasonable attorney’s fees on top of the claim (up to one-third of the judgment). You may also be able to bring a separate bad faith claim for the harm an unreasonable refusal caused.

If the other driver’s insurance company says no, check your own policy for these coverages. A claim on your own policy doesn’t depend on the other company’s decision. Every claim works differently, and our South Carolina personal injury lawyers can guide you through your options.

What to Do When Your Claim Closes Without a Check

A closed file isn’t a finished one. Whether you got a denial letter, a low offer, or silence, here are five steps you can take:

• Get the reason in writing. Ask the adjuster which facts or policy terms the decision rests on, and whether new evidence would reopen your claim.
• Put requests to your own insurance company in writing. If the denial came from your own company, ask in writing for the records it relied on, and make your demand for payment in writing too. The 90-day period in S.C. Code § 38-59-40 runs from that demand.
• Keep treating and don’t sign anything yet. Gaps in care often get injury claims cut. Signing a release usually closes your claim for good, even if new symptoms show up later.
• File a complaint with the South Carolina Department of Insurance. The Department’s Office of Consumer Services takes complaints about claim disputes. In fiscal year 2025, it resolved 4,431 complaints and returned about $7.8 million to consumers.
• Talk to one of our lawyers before your deadline. You generally have three years from the date of the accident to file a lawsuit in South Carolina. One of our South Carolina car accident lawyers can help you gather what your claim needs.

Get a Straight Answer About Your Denied Claim

A denial from the other driver’s insurance company is that company’s opening move; you don’t have to accept it as the last word. If you were injured in an accident and your claim was denied, cut, or closed without an explanation, our team at Armada Law Injury Attorneys can help. We’ll read the letter and your policy, give you an honest answer about where your claim stands, and help you gather what it needs.

Insurance companies have teams of lawyers, and you deserve someone in your corner too. Our team speaks English and Spanish, and there’s no fee unless money is recovered for you. Contact us or call 833-332-3128 when you’re ready.