Bodily Injury Is Now A Big Share of Auto Claims Payouts. Is AI to Blame for That Too?

Bodily injury auto claims have surpassed auto physical damage payouts for the first time, a trend that is being pushed by a rise in the average payout and an increase in BI claim frequency. Artificial intelligence may also have a hand in the trends, the authors of a report out on Thursday say.

The report from CCC, a provider of services and information for auto claims and collision repair industries, shows that BI claims have been on the rise, hitting a rate of one-in-four auto physical damage claims by 2025. That was up from a historical rate of roughly one-fifth of the frequency of auto physical damage claims.

The report shows BI claims were 52.3% of the combined dollars paid across the two claim categories, up from 44.4% in 2022.

The report’s authors place some of the blame on “a convergence of frequency and severity pressure,” with BI claim frequency rising 4% over the last two years and auto physical damage claim frequency falling 14%. Importantly, the average personal BI claim payout rose 21% over the same two years, the report shows.

It calls out several ongoing developments in the auto claims environment, including increasing numbers of uninsured and underinsured motorists, healthcare inflation and changing treatment patterns, more attorney involvement, social inflation and generative AI technology.

In the latter case, timing is one indicator of AI’s potential involvement in pushing up BI claims. The BI cost upswing began about the same time as generative AI tools began taking their foothold on society. The report’s authors consider AI’s role as “more of a force multiplier” than the sole influence. A report from cyber insurer Resilience in late July also refers to AI as a force multiplier.

According to the CCC report, AI is making filing claims easier by cutting down the effort to turn medical records, bills, police reports, photographs and claimant narratives “into highly organized demands.”

“It’s condensing what used to take an army of paralegals and support staff days to gather up bills, records, negotiate, and all the admin work that goes into this — dictating a demand letter, citing the proper documentation — things that used to take days are condensed now down to hours,” said Erik Bahnsen, director of casualty industry analytics at CCC. “So, what used to be an enormous legal backlog potentially can now be condensed into a very short amount of time.”

To backup the assertion that AI is at least partly to blame for the rising BI trend, the report cites a Thomson Reuters survey showing that 41% of law firms now say they are using generative AI, up from 28% in 2025.

The pace at which BI claims have risen has been more rapid in the last few years as well. The average amount paid per BI claim rose 9% to 10% per year to reach more than 30% over four years at more than $30,000 per feature. Roughly 70% of that inflation has occurred since the first quarter of 2020, according to the report.

As profitability in overall personal auto results improved, the liability loss ratio in 2025 was running 20 points higher than the auto physical damage claims ratio, which the report shows was largely driven by increasing BI frequency and severity.

Social inflation and nuclear verdicts have also had a big hand in all of this.

According to CCC, there was a 33% increase in liability costs associated with social inflation between 2020 and 2024, a 52% year-over-year increase in verdicts of $10 million or more, and a cumulative economic and social inflation impact of $92 billion to $102 billion on personal auto over the past decade.

Medical costs are also a significant cost driver. Average third-party submitted medical expenses during claim evaluation and negotiation rose to $32,300 in the first quarter of 2026 from $24,300 in the first quarter of 2023, the report shows.

High-acuity surgical procedures continue to contribute to claims severity, but lower-complexity medical treatments are “becoming increasingly consequential,” with data showing growing use of corticosteroid injections, platelet-rich plasma therapy, and extracorporeal shockwave therapy, the report states.

Bahnsen said the data reveals a shift away from a traditional scenario in which a minor bodily injury claim for a sprain or strain following a rear-end collision or minor fender bender led to a doctor visit and some follow up physical therapy or chiropractic treatment.

“We’re seeing less of that now,” he said. “What’s happening is that physical therapy-chiro that you might see for eight weeks-12 weeks is being either truncated or bypassed completely for these sorts of low-complexity surgical interventions, things like steroid injections or experimental treatment like platelet rich plasma therapy, shockwave therapy, and we haven’t seen that before. That makes up a growing percentage of the treatment.”

That shift also happened to coincide with the increased availability of AI technology making it easer to file claims and lawsuits, but it also points to social inflation in an era where society has become more litigious.

“There’s the argument that the outcomes are driving that, so maybe going to low complexity surgical versus the more traditional methods yields a higher settlement or a higher probability of a policy limit settlement,” Bahnsen said. “You could say they could be letting the data lead to what ultimately yields a better outcome.”