Insurance Group Faults Rising Repair Costs For Higher Insurance Prices - BodyShop Business
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Insurance Group Faults Rising Repair Costs For Higher Insurance Prices

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The Consumer Price Index (CPI) for the cost of auto body work was 4.1 percent higher in January 2009 compared to January 2008, and the CPI for auto insurance was 4 percent higher for the same period, the U.S. Department of Labor reported.

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Steve Weisbart, senior vice president and chief economist for the Insurance Information Institute, told the National Underwriter Online News Service that increased prices for auto body repairs have had an impact on insurance claims, “so that’s probably a good part of the explanation why auto insurance is up.”

Weisbart added that auto damage claim frequency was down for the first three quarters of 2008, “but severity dollar amounts, on average, are up higher than frequency is down, so there are fewer accidents but they are costing more.”

Loretta Worters of the Institute added that an increase in litigation and the associated costs also have affected insurance prices.

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