Auto Injury Severity Up 40% as States Raise Insurance Minimums

Bodily injury claim severity has risen 40% since 2019, according to LexisNexis Risk Solutions—and four states responded by raising mandatory auto insurance minimums in 2024-2025, including California's first increase in over five decades. The shift comes as the annual economic cost of motor vehicle crashes exceeds $340 billion, yet only 54% of those costs are covered by insurance, leaving crash victims to absorb nearly a quarter of expenses out of pocket.

For personal injury firms, the convergence of rising claim values and improved coverage limits signals both opportunity and complexity. Higher severity means larger potential recoveries—but also more complex medical documentation requirements and longer treatment histories to analyze.

Four States Update Outdated Minimums

California, Virginia, North Carolina, and Utah all raised their mandatory minimum coverage levels within the past year—the most significant wave of state-level insurance reform in decades.

California doubled its minimums effective January 1, 2025, raising bodily injury coverage from $15,000 per person/$30,000 per accident to $30,000/$60,000. Property damage limits increased from $5,000 to $15,000. The Protect California Drivers Act (SB 1107) marked California's first minimum coverage increase since the early 1970s.

North Carolina's changes, effective July 1, 2025, were even more substantial. Bodily injury minimums rose from $30,000/$60,000 to $50,000/$100,000, and property damage limits jumped from $25,000 to $50,000—now the highest in the nation. North Carolina also made underinsured motorist coverage mandatory for all new or renewed policies.

Virginia and Utah implemented increases effective January 2025 as well, though with smaller adjustments than their counterparts.

The Severity Surge Driving Reform

The push to update minimums reflects a fundamental shift in auto injury economics. LexisNexis data shows bodily injury severities rose sharply at the pandemic's outset, then added another 15% increase from late 2021 through mid-2022. The 40% cumulative increase since 2019 has fundamentally changed the economics of auto injury claims.

Commercial auto liability tells an even starker story. Industry data shows severity in that sector increased 93.5% between 2015 and 2024—nearly doubling in under a decade.

Several factors are driving the surge:

Faster driving speeds during and after the pandemic increased crash severity, even as overall accident frequency initially declined.

Social inflation—the term insurers use for changing jury attitudes toward plaintiffs—reached 7% in 2023, a 20-year high according to Swiss Re analysis.

Nuclear verdicts (awards exceeding $10 million) rose 27% year-over-year in 2023, with 27 "thermonuclear" verdicts exceeding $100 million that year alone. Large court awards have driven a 57% increase in U.S. liability claims costs over the past decade.

Rising medical and vehicle costs compound the problem. Average bodily injury claims reached $26,501 in 2022, and one in five collisions now results in a total loss given elevated repair costs.

The Coverage Gap Problem

Despite the severity increases, the American Association for Justice reports that less than half of crash costs are actually covered by insurance. Crash victims absorb 23% of costs directly, with hospitals, charities, and taxpayers picking up the remainder.

The gap is particularly acute for underinsured situations. Research indicates that about one in three U.S. drivers are either uninsured or underinsured—with underinsured drivers carrying only state minimums making up over half that group.

Attorney Involvement Rising

The coverage complexity is driving more claimants toward legal representation. 52% of bodily injury claimants now hire attorneys, up from 49% in 2007—and the representation gap in outcomes is substantial. Average settlements with attorney representation reach $44,600, compared to $13,900 without.

One in four consumers say they would hire an attorney before even contacting their insurer, according to Insurance Research Council data—a shift that reflects growing awareness of the complexity involved in navigating multi-policy claims.

What This Means for PI Practices

The convergence of higher severity, updated minimums, and growing attorney involvement creates specific operational implications for personal injury firms.

Medical Documentation Becomes Critical

With average bodily injury claims exceeding $26,000 and nuclear verdicts continuing to rise, thorough medical documentation is essential to proving the full extent of injuries. Higher-severity cases typically involve:

• Multiple treating providers (primary care, specialists, physical therapy, imaging centers)
• Extended treatment timelines requiring comprehensive records
• Pre-existing condition analysis to establish causation
• Future medical cost projections requiring detailed clinical evidence

Firms that can efficiently retrieve and analyze complete medical histories are better positioned to maximize recovery in an environment where claim values continue to climb.

Coverage Stacking Requires Provider Discovery

When at-fault driver coverage is insufficient—still common despite the minimum increases—recovery depends on identifying all available coverage sources. That includes:

• Underinsured motorist policies (now mandatory in North Carolina)
• Umbrella or excess liability coverage
• Medical payments coverage
• Health insurance subrogation coordination

Each coverage source requires documentation of the same underlying injuries, making comprehensive medical records essential across the entire claims process.

The Bottom Line

The auto injury landscape has fundamentally shifted. Severity is up 40%, nuclear verdicts are increasing 27% annually, and states are finally responding with long-overdue minimum coverage increases. For personal injury practices, this means larger potential recoveries—but also more complex cases requiring comprehensive medical documentation across multiple providers and coverage sources.

Firms that can efficiently gather, organize, and analyze medical records will be better positioned to capitalize on improved coverage limits while managing the increased complexity that higher-severity cases demand.

Sources: American Association for Justice - January 2026 Report, LexisNexis Risk Solutions, Los Angeles Times, NC Department of Insurance, Insurance Journal, Gallagher Re, Insurance Research Council.

This article provides general information about auto insurance trends and should not be construed as legal or insurance advice. Consult with qualified professionals for advice specific to your situation.