Auto Claims Spike as Gas Prices Drop - BodyShop Business

Auto Claims Spike as Gas Prices Drop

Auto insurance claim frequency has increased since gas prices have dropped from the record levels of 2008, National Underwriter (NU) reports. The publication says two large insurers and industry regulators noted the trend.

The Hartford reported an uptick in auto liability claim frequency that President Juan Andrade said was "clearly driven by an increase in miles driven as gas prices have become more normalized," according to NU.

At Allstate, head of investor relations Bob Block noted that in the third quarter of 2009, claim frequency increased significantly, returning to levels similar to those in 2007, the publication said.

"Auto frequencies in 2008 were favorably impacted by a variety of factors – high gas prices, drop in miles driven and rising unemployment, to name a few – with last year’s third quarter being the most favorably affected," Block said.

Economist Robert Hartwig, president of the Insurance Information Institute, told NU that he expects claim frequency to increase more slowly in states hit harder by the recession, such as California, Florida and Michigan.

"I predict now we will see an end to the decline in auto [claim] frequency, and then it will move back up," he said.

Hartwig added that the situation similar to the oil crisis of the 1970s that sent gas prices soaring, noting that the insurance industry "saw a resumption of frequency after falling for several quarters" during the era and that it took about two years for claims frequency to reach pre-energy crisis levels.


More information:

Read the story from National Underwriter


Collision Severity Down Two Years in a Row

 

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Miles Driven Increase Two Straight Months Over 2008 Levels

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