IRC: U.S. Auto Claim Severity Surged During Pandemic
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Tuesday, July 18, 2023
General Automotive, Professional Services, Insurance, Automotive, IRC, PD, Insurance Information Institute, FCAS, COVID-19, Vehicle insurance, COVID, National Association of Insurance Commissioners, MAAA, Insurance commissioner, John Carbone Porfilio, Injury, National Association, The Institutes, Safety
While U.S. auto claim frequency has declined over the past 20 years, claim severity increased and then surged since the global pandemic began in 2020, according to a newly published report from the Insurance Research Council (IRC) , a division of The Institutes.
Key Points:
- While U.S. auto claim frequency has declined over the past 20 years, claim severity increased and then surged since the global pandemic began in 2020, according to a newly published report from the Insurance Research Council (IRC) , a division of The Institutes.
- The IRC report, Trends in Personal Auto Insurance Claims 2002–2022, showed that claim severity accelerated beginning in the mid-2010s.
- During the pandemic years (2020–2022), claim frequency plummeted but claim severity skyrocketed, especially for vehicle damage claims, due in part to enormous inflationary pressures on replacement parts and auto body repair labor costs.
- Porfilio added, “However, as claim frequency leveled off and claim severity accelerated, the average payment per insured vehicle for most coverages began to climb steadily until the 2020 drop due to COVID-19.