In the News: New Claims Data Put GAP’s Value in Focus

New insurance claims data, record total-loss rates and rising negative equity put fresh numbers behind the financial protection GAP provides car buyers.

By Gregory Arroyo

Car buyers pay for auto insurance expecting it to protect them financially when something goes wrong. A recent report from The Wall Street Journal shows that protection doesn’t always extend as far as consumers might expect.

For F&I managers accustomed to hearing “I’ve got insurance” during a GAP presentation, the Journal’s findings add some timely context to that familiar objection. The claims examined by the Journal are separate from the total-loss deficiency GAP is designed to address, but they underscore how one accident can leave a customer facing different financial exposures.

The Wall Street Journal found that insurers closed 45% of resolved auto liability and medical claims without payment in 2025, up from 35% a decade earlier. Those claims include losses from accidents caused by the insured — including damage to another vehicle and injuries to its occupants — as well as certain medical and uninsured or underinsured motorist claims.

There isn’t one explanation for why so many claims close without payment. Insurers told the Journal that an uptick in fraud, driven in part by fake claims enhanced with AI tools, is triggering more denials.

The industry also points to consumers turning to litigation earlier in the claims process. Claims can also be paid by another driver’s insurer, withdrawn by the customer, fall outside policy terms, or come in below a deductible.

Plaintiff attorneys and consumer advocates dispute the industry’s explanation. Attorneys argue that increasing denials are driving more consumers to litigation, while consumer advocates contend insurers are becoming tougher on claims to improve profitability. The Journal reported that personal auto insurers paid about 61 cents in claims for every dollar in premium in 2025, their lowest net loss ratio since 2020.

Total Losses Push Higher

For F&I, the Journal’s report also brings the GAP conversation into focus when an accident results in a total loss. GAP remains the No. 2 product on the F&I menu behind vehicle service contracts, penetrating at a 39% clip during the first half of 2026 across the more than 9,000 U.S. dealer rooftops represented in StoneEagleDATA.

The latest GAP claims data put some significant numbers behind that protection. Assurant, a major provider of GAP and other vehicle protection products, reported an average paid GAP claim of $4,987 in the first quarter of 2026. That’s roughly 35% higher than the $3,692 average when GAP losses last peaked in 2018.

Assurant expects GAP losses to remain elevated through 2026, although claims are showing signs of normalization. Its data also show total losses accounting for 23.9% of claim counts during the first quarter, matching a record high.

Other claims data point in the same direction. CCC Intelligent Solutions, whose technology connects insurers, collision repairers and other participants in the auto claims industry, reported that the share of claims flagged as total losses reached an industry-high 23.1%.

Higher repair costs are part of that trend. U.S. Bureau of Labor Statistics data show motor vehicle maintenance and repair prices rose 7% year over year in June and have climbed 54.7% since June 2019. CCC cited rising repair costs and older vehicles among the factors contributing to higher total-loss frequency, while Assurant also pointed to increasingly complex vehicle technology.

More Owed When a Vehicle Is Totaled

The other side of a potential GAP claim is the amount still owed on the vehicle.

Edmunds reported that 29.6% of trade-ins toward new-vehicle purchases carried negative equity during the second quarter of 2026. Those underwater trade-ins carried an average negative equity of $6,884, the highest amount Edmunds has recorded for a second quarter.

The numbers tell the story from different sides. More damaged vehicles are reaching the total-loss threshold. Repair costs are substantially higher. Many consumers who are underwater owe thousands of dollars more than their vehicles are worth. And Assurant is paying nearly $5,000 on average for a GAP claim.

For F&I managers, those numbers put current evidence behind a product conversation they already know well. The Journal’s finding that 45% of resolved liability and medical claims closed without payment isn’t about GAP, but it does challenge the assumption behind “I’ve got insurance” — that insurance will take care of everything when an accident happens.

StoneEagleDATA is part of StoneEagle’s broader suite of connected solutions — including StoneEagleMENU, StoneEagleMETRICS F&I, Pencilwrench, and StoneEagleMETRICS Service — helping dealers make smarter decisions across F&I, sales, and service.