A new nationwide analysis by Anidjar & Levine has revealed which U.S. states see the highest rates of auto insurance claim denials — and why so many drivers are left without payouts after accidents.
The study examined complaint data from across the country, identifying the top ten states where drivers face the greatest challenges in getting their claims approved. The findings are sobering: between 5% and 15% of car insurance claims are denied annually, with California, Texas, and Florida topping the list.
California: The Epicenter of Denials
California drivers lodged 4,800 complaints about denied claims in the most recent reporting period. But the problems don’t stop there — the state also sees frequent delays in claim payments and contentious settlement negotiations.
Experts point to several contributing factors:
- High accident volume in densely populated urban areas like Los Angeles and San Francisco.
- Complex state regulations that can slow the claims process and create more opportunities for disputes.
- Disputes over fault in multi-vehicle collisions, which are more common in congested traffic environments.
California’s mix of heavy traffic, high repair costs, and strict insurance laws creates a perfect storm for claim disputes.
Texas: Denials and Low Settlement Offers
Texas ranked second, with 4,200 complaints of denied claims. In addition to outright rejections, many drivers reported low settlement offers and poor claim handling.
The state’s sprawling geography and mix of urban and rural driving conditions create unique challenges for insurers. Policyholders in Texas are also more likely to encounter disputes over:
- Repair costs — especially when using preferred vs. independent repair shops.
- Coverage limits — where the insurer argues the damage exceeds policy caps.
- Fault determinations — particularly in rural areas with limited accident scene documentation.
Florida: Fraud and Uninsured Drivers
Florida came in third, with 3,800 complaints of claim denials. The state’s insurance market is complicated by:
- High rates of uninsured drivers, which can complicate recovery after an accident.
- Fraudulent claims, which make insurers more aggressive in scrutinizing legitimate ones.
- Delayed settlements, often tied to disputes over medical treatment costs in personal injury cases.
These factors not only increase the likelihood of a claim being denied but also contribute to higher premiums for all drivers in the state.
The Rest of the Top Ten
Following the top three states were:
- New York – Known for disputes over repair shop estimates and no-fault insurance complexities.
- Illinois – Frequent disagreements over diminished value claims.
- Pennsylvania – Delays tied to weather-related accident surges.
- Georgia – High rates of underinsured motorist claims.
- Michigan – Complications from unique no-fault insurance laws.
- Ohio – Disputes over medical expense coverage.
- North Carolina – Denials linked to strict contributory negligence rules.
Why Claims Get Denied
The Anidjar & Levine study identified several recurring reasons for denial:
- Incomplete or inaccurate claim information — missing documents, incorrect accident details.
- Policy lapses due to missed premium payments.
- Exclusions for certain drivers, uses of the vehicle, or types of damage.
- Late reporting of accidents, sometimes beyond the policy’s required timeframe.
- Disputes over fault, especially in states with comparative or contributory negligence laws.
- Inadequate coverage for the type of damage claimed, such as flooding or aftermarket parts.
How Drivers Can Protect Themselves
The report offers practical steps to reduce the risk of denial:
- Set up autopay to avoid policy lapses.
- Review exclusions to ensure coverage matches your driving habits.
- Report accidents promptly, ideally within 24 hours.
- Provide complete documentation, including photos, police reports, and witness statements.
- Keep your insurer updated on changes like new drivers or vehicle use.
- Understand your state’s insurance laws, especially if you live in a no-fault or contributory negligence state.
Appealing a Denial
If your claim is denied, you have the right to request a written explanation and file an appeal. The Anidjar & Levine study emphasizes that persistence and thorough documentation can make a difference in overturning a denial.
Steps to take include:
- Requesting the denial letter and reviewing the stated reason.
- Gathering additional evidence to counter the insurer’s position.
- Seeking legal advice if the denial appears unjustified.
- Escalating the complaint to your state’s insurance regulator if necessary.
The Bigger Picture
While the top three states stand out, the study underscores that claim denials happen everywhere. Even in states with lower complaint volumes, drivers can face the same pitfalls if they’re not proactive.
By understanding the most common reasons for denials and taking preventive measures, policyholders can improve their chances of a smooth claims process — and avoid the financial strain of an unexpected rejection.
About the Study: The research was conducted by Anidjar & Levine a Florida-based personal injury law firm that regularly analyzes insurance and public safety data to inform consumers and advocate for policyholder rights.
