Americans are required to carry auto insurance to drive legally, yet a Wall Street Journal analysis reveals that payouts are becoming increasingly unreliable. More than six million traffic accidents occurred last year, but auto insurers denied nearly half of the liability and medical claims they resolved. The denial rate reached 45% last year, up from roughly 35% a decade ago, indicating a growing trend of insurers refusing coverage.

This shift mirrors challenges seen in homeowners insurance, where financial backstops are also eroding. Christopher Benton, a lab technician from Adelanto, Calif., experienced this firsthand after a minor 2023 collision. Despite having $5,000 liability coverage, his claim was rejected by Allstate-owned National General because his 15-year-old son was involved.

The near coin-flip odds of receiving a payout leave many drivers vulnerable despite fulfilling legal insurance requirements.