Auto Claims Are Down. Injury Payouts Are Up. The Mismatch Is Reshaping Auto Insurance.

Personal auto claims have fallen three years running. Verisk's ClaimSearch Trends Report puts the 2025 total at 31.6 million. Lower claim volume might seem like it should ease pressure on what drivers pay for coverage. But it has not removed pressure from auto insurance premiums. The reason is what's inside the claim count, not the count itself.

Bodily injury (BI) liability claims now account for more than 26% of total auto insurance claims dollars, up from less than 20% in 2022, according to LexisNexis Risk Solutions' 2026 U.S. Auto Insurance Trends Report. A property damage claim is usually tied to repair or replacement costs. A bodily injury claim can pull in medical treatment, lost wages, legal fees and settlement negotiations that run into the tens of thousands of dollars. As the mix of claims shifts toward bodily injury, more of the industry's claims dollars go to injury losses even when total claim volume falls.

That math reaches drivers who carry liability coverage. When bodily injury costs rise, they put upward pressure on liability premiums, even for drivers with clean records.

Three years of falling claim volume looks like good news, but it's not the full picture. Personal auto claims declined nearly 3% in 2025, following a roughly 5% decrease in 2024. Verisk's ClaimSearch data shows risk becoming more concentrated inside a shrinking pool, not dissipating.

LexisNexis Risk Solutions found the ratio of bodily injury claims to property damage claims rose from 24 per 100 in 2022 to 29 per 100 in 2025. A higher BI-to-PD ratio means each dollar of auto insurance claims volume is more expensive to resolve, even as the total number of claims falls.

CCC Intelligent Solutions Q2 2025 data shows the average third-party bodily injury paid outcome reached $29,100 per injured party, an 11% increase since Q4 2023 and a 36% increase since Q4 2020. CCC tracks paid outcomes across liability claims within its network. The upward trend since 2020 points to structural rather than cyclical cost pressure.

Part of the explanation is social inflation. The Casualty Actuarial Society and Insurance Information Institute published a joint year-end 2024 study finding bodily injury severity rising at an annualized rate of roughly 7.9%. Social inflation is the shorthand for cost pressure beyond the underlying medical bill, including litigation funding, attorney involvement, larger jury awards and higher settlement values. When those forces are at work, auto insurance claims that would have settled for less a decade ago settle for more today.

LexisNexis Risk Solutions found distracted driving violations rose 57% across all age groups from 2022 to 2025. Among drivers aged 36 to 45, violations rose more than 70%. Among drivers 66 and older, the increase reached 73%. LexisNexis says total miles driven rose only 2% over this period. The rise in violations reflects changes in driver behavior, not simply more time on the road.

Distracted driving matters to BI claims because it is a risk signal for at-fault crashes, which can trigger bodily injury liability claims. The claim that follows must cover the injured party's damages up to the at-fault driver's policy limits. Because the increase spans all age groups, the elevated risk is not concentrated in any single driver demographic.

Most states require bodily injury liability coverage, and insurers file rate adjustments with state regulators based on their claims experience. When BI severity climbs 7.9% annualized and BI's share of total claims dollars rises from less than 20% to more than 26% in three years, the liability component of a personal auto insurance policy gets more expensive to price. That cost flows to drivers at renewal, even those who have never filed a BI claim.

LexisNexis Risk Solutions found that more than 47% of auto policies in force were shopped at least once in the 12 months ending Q4 2025, a record rate. The share of policies with deductibles of $1,000 or more rose from 23% in 2022 to 33% in 2025, as policyholders adjusted coverage to manage premium costs. Shopping activity and coverage changes both point to a market where liability costs are rising faster than many drivers expected.

Newer vehicles with advanced driver assistance systems (ADAS) help reduce claim frequency, but the remaining claim pool is shifting toward costlier injuries. LexisNexis Risk Solutions says newer vehicles, which are more likely to carry ADAS and automatic emergency braking (AEB), show more favorable claim frequency trends. Crash-avoidance features cut lower-severity incidents, which leaves the remaining claim pool weighted toward higher-cost cases. For a detailed look at how ADAS affects repair costs and total-loss decisions, see our page on total loss rates.

Reviewing your bodily injury liability limits is the most direct step. Most state minimums were set years or decades ago. At current average third-party BI paid outcomes of $29,100 per injured party, a minimum limit of $25,000 per person may leave you exposed for costs your personal assets would have to cover.

Bodily injury costs, social inflation and shifting claim patterns all affect what drivers pay for liability coverage. These answers cover the most common questions about why rates are rising and how to review your own coverage.