MALVERN, PA — Average U.S. auto bodily injury claim payments climbed at a 7.8% annualized rate from 2017 to 2022, more than twice the pace of medical care inflation, as attorney representation and litigation increased, according to a new Insurance Research Council analysis.
Average bodily injury claim payments rose from about $14,000 in 2017 to more than $20,000 in 2022, with growth accelerating after the pandemic, the Malvern-based research organization found.
The findings are based on more than 7.4 million auto injury claims closed with payment between mid-2017 and mid-2022. The data were contributed by nine insurers representing approximately 43% of the U.S. private passenger auto insurance market.
The study also found settlements grew faster than the underlying medical bills. Bodily injury claimants received $2 in total settlement, excluding legal fees, for every $1 of medical bills paid.
That ratio increased from $1.80 in mid-2017 to more than $2.30 by mid-2022, according to the report. The IRC attributed the difference in part to general damages, which can compensate claimants for losses beyond direct medical expenses.
Attorney involvement also increased during the period. Across all coverages studied, the share of claimants represented by attorneys rose from 40% in 2017 to nearly 50% in 2022, while representation among bodily injury claimants increased by 11 percentage points.
Litigation rates rose from 10% to 18% of claimants over the same period.
Represented bodily injury claimants also experienced substantially longer settlement timelines. Their claims took a median of nearly 440 days to close, more than twice as long as claims involving people without attorneys.
After medical costs and legal fees, represented claimants received $1.40 per dollar of medical bills compared with $1.80 for unrepresented claimants, according to the IRC analysis.
“Rising medical costs, boosted by general damages settlements, and increasing attorney involvement and litigation are all putting sustained upward pressure on claim severity, and ultimately, on insurance affordability for consumers,” IRC President Patrick Schmid said.
Schmid also serves as chief insurance officer of the Insurance Information Institute.
The analysis draws on the IRC’s new Auto Injury Claims Analytics Database, which combines claim-level records, payment transactions and medical billing information. Its findings establish associations between legal involvement, settlement timing and claim costs but, based on the information released by the IRC, do not by themselves establish that attorney representation or litigation caused the full increase in claim severity.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.