VCA Software

Auto Insurance Trends: Rates, Verdicts, and Policyholder Satisfaction

Auto insurance rates continue to climb. According to MarketScout, commercial auto rates were up 9% in the third quarter of 2021, which is higher than the increase of 6.8% seen in U.S. commercial rates on average. Personal auto insurance rates were up 4.7%.

RECKLESS DRIVING LEADS TO SURGE IN FATALITIES

During the pandemic, people drove less, but traffic fatalities did not decrease. The NHTSA estimates that 38,680 people died in motor vehicle crashes in 2020. This is an increase of 7.2% compared to 2019, when 36,096 people died. The preliminary numbers for 2021 look even worse. It’s estimated that 20,160 people died in motor vehicle crashes in the first half of 2021. This represents an increase of 18.4%.

Many people are pointing to a rise in reckless driving as the culprit. Behavioral research findings from the NHTSA indicate that speeding has increased while seatbelt use has decreased.

REPAIRS ARE GETTING MORE EXPENSIVE

Expensive repairs are also impacting rates. Many new vehicles come equipped with sophisticated sensors and other pieces of technology designed to improve safety. These systems may help prevent crashes, but they can also make repairs more expensive.

According to Claims Journal, a report from CCC Intelligent Solutions finds that collision claims are 15% below 2019 levels. However, repairs are costing more. The average cost for parts increased 6% between 2020 and 2021. In addition to the growing complexity of vehicles, supply chain issues and increased crash severity are also impacting repair costs.

NUCLEAR VERDICTS IMPACT COMMERCIAL TRUCKING

For the commercial auto market in general and trucking specifically, nuclear verdicts are a trend that can’t be ignored. A nuclear verdict is a jury award for an exceptionally large amount, often $10 million or more. Nuclear verdicts against the trucking industry have been on the rise, and it’s impacting commercial insurance rates.

Claims Journal reports that trucking insurers have lost around $1.8 billion since 2018 due to multi-million-dollar settlements and jury verdicts along with third-party litigation funding initiatives and pressure from plaintiff attorneys that target the industry.

In October 2020, FreightWaves reported that a $411 million verdict awarded by a Florida jury against a trucking company was thought to be the biggest ever. Since then, a $1 billion verdict has taken that record, also in Florida and involving two trucking companies.

BUT CLAIMS SATISFACTION IS HIGH

Despite all these problems, claims satisfaction has reached record heights. The J.D. Power 2021 U.S. Auto Claims Satisfaction Study found that overall satisfaction had reached a record high of 880 on a 1,000-point scale. This is the fourth consecutive year of auto claims satisfaction improvement, and insurers that are able to offer a low-touch claims process are seeing the highest levels of satisfaction.

Digital tools have helped speed up the claims process. Another J.D. Power study found that customer adoption of digital claims tools has increased 20% over the three years.

NEED TO BOOST YOUR DIGITAL CLAIMS HANDLING CAPABILITIES?

VCA Software can automate many points of the claims journey, resulting in time and cost savings for you, and faster claims resolution for the policyholders you serve.

Request a demo to learn more.

NEWSLETTER
SUBSCRIBE TO NEWSLETTER
EXPLORE
MORE TO EXPLORE