Every state that requires you to carry liability coverage requires you to buy a promise. Nobody makes the insurer publish how often it keeps it.
That data does exist, though. It’s just buried where almost no driver will ever look: in the statutory annual statement every property-casualty insurer files with regulators. Deep in Schedule P, the reserve section, are two adjacent columns counting claims closed with a loss payment and claims closed without one. Private passenger auto liability and medical injury claims land in Part 3B. Your collision and comprehensive claims — the fender-bender stuff — sit in a completely different bucket, Part 3J. That distinction matters more than most coverage of this issue admits, and we’ll come back to it.
What the filings actually show
Weiss Ratings, an independent rating agency that takes no money from the companies it rates, pulled twenty years of those columns for insurers heavily concentrated in New York auto business. Its April report counted roughly 2.68 million private passenger auto liability claims closed in 2025, of which about 1.29 million — 48.3% — closed with nothing paid. In 2005 the same measure sat at 33.6%. Weiss calls the unpaid closures “flat-out denials,” which is a rhetorical choice, not an accounting one.
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The spread between carriers is the part that’s hard to wave away. Allstate closed 1,243,516 liability claims and paid nothing on 689,832 of them — 55.5%. Two Progressive units each landed at 47.4%. NY Central Mutual Fire came in at 26.4%. GEICO’s two main entities sat around 38.7% and 39.5%. Same state, same year, same fraud environment, same courts. Twenty-nine points of daylight.
On physical damage — your own collision claim — the picture is different. Weiss found that rate essentially flat since 2005, though the company-to-company range is even wider: 34.6% down to 7%.
The caveats are real, and they’re specific
“Closed without payment” is not a synonym for “denied,” and anyone selling you that equivalence is skipping the fine print. The NAIC’s own reporting instructions define the category as “Claims closed with no payment made to an insured or third party,” and then explicitly fold in claims that closed because the loss came in under the deductible, and demands where no policy was even in force but a file got opened and investigated.
Then there’s the counting unit. These are claimant-features, not accidents. One intersection collision with three occupants in the other car generates three bodily injury features. If your insured wasn’t at fault, all three properly close unpaid — and that’s the system working exactly as designed. Liability insurance is not a fund that pays everyone who asks; it pays people your policyholder is legally responsible for injuring.
Which is precisely why the 22-point rise since 2005 is the interesting number, not the 48.3%. Nothing about fault determination got structurally harder over two decades. New York’s 2002 tightening of Regulation 68 did shorten no-fault filing windows — 30 days for notice of claim, 45 for medical bills — which mechanically converts late paperwork into unpaid closures. That’s a genuine partial explanation, and it’s also an argument that a chunk of the increase reflects procedure rather than merit.
The profit backdrop nobody disputes
The 2025 numbers are not close. Per the NAIC’s own year-end analysis, the P&C industry booked a $68.7 billion underwriting gain against $25.3 billion the prior year, a 92.9% combined ratio, and policyholders’ surplus at a record $1.27 trillion. Personal auto liability’s pure net loss ratio improved to 68.1%; physical damage hit 52.6% as losses fell 8%.
State Farm’s auto book swung from a $2.7 billion underwriting loss to a $4.6 billion gain on $71.3 billion earned. Allstate’s auto segment posted $5,724 million in underwriting income against $1,810 million in 2024, an 85.0 combined ratio.
Here’s the mechanical detail worth knowing: a meaningful slice of that came from releasing reserves, not from writing better business. The industry took down $6.475 billion of prior-year private passenger auto liability reserves and another $5.316 billion on auto physical damage. Allstate’s full-year auto combined ratio got 4.8 points of help from prior-year non-catastrophe reserve re-estimates. Translation: injury severity landed softer than actuaries had assumed, and money already set aside for old claims flowed straight to the bottom line. Whether claims closed unpaid contributed to that softness is a question the filings cannot answer, because insurers report how many claims close unpaid and never why.
Where regulators are actually moving
California showed what enforcement looks like when it happens. In October the Department of Insurance filed accusations against Tesla Insurance Services, Tesla Insurance Company and underwriter State National, seeking license suspension or revocation and penalties up to $5,000 per act — $10,000 if willful. One allegation is worth memorizing: “Failure to advise policyholders of their rights to have their claims denials reviewed by the Department.” Not paying isn’t the only violation. Not telling you that you can appeal is a separate one.
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More consequential long-term is a quiet change in the Market Conduct Annual Statement. The 2025 data call asks carriers whether they use digital claim settlement, requires them to name the vendors and algorithms involved, and breaks closed-without-payment counts out by digital, hybrid, and non-digital handling for collision, property damage, UMPD and comprehensive. That’s the first structured regulatory window into algorithmic claim decisions. Filings were due April 30. New York, meanwhile, only joined MCAS for the 2025 data year, having sat out alongside North Dakota while every other jurisdiction reported.
What to do with this as an owner
Buy uninsured/underinsured motorist coverage at real limits, and don’t skimp on MedPay or PIP. UM/UIM is the coverage that responds when the other driver’s carrier decides your injury claim isn’t their problem — it converts a third-party fight into a first-party one, where you have a contract and a bad-faith remedy instead of a stranger’s adjuster and a phone number.
Get every denial in writing with the policy language cited, and file with your state insurance department when you disagree. Justified complaints are what built the California file over three years.
And read the fine print on the good news. Premiums are finally easing — BLS logged motor vehicle insurance down 0.3% in July after a 2.0% drop in June, State Farm is paying a $5 billion auto dividend with rate cuts in 40 states, and Allstate says it lowered prices for 7.8 million customers by an average of 17%. That last one came “through tailored coverage reviews,” per Allstate’s own release. A coverage review that lowers your premium may have lowered your protection to do it. Check the declarations page before you celebrate.