Auto Insurance Claims Down 40%-50%

As road traffic levels plunge across the U.S. in the wake of the spread of the coronavirus, so have accidents and insurance claims.

Nationwide collision-related claims were down an estimated 40% to 50% for personal vehicles and 30%-40% for commercial vehicles in March, according to Snapsheet COO Andy Cohen. He says those figures are the lowest for such claims since the 1960s.

Some small carriers saw claim volumes fall as much as 80% last month, Cohen says. Chicago-based Snapsheet works with 85 insurance carriers, providing automated services for claim filing, appraisals, payments and fleet management.

Big Refunds in the Works

Due to the lower number of anticipated claims, the insurance industry is expected to provide customers with a combined $10.5 billion in refunds and discounts in coming months, according to the Information Insurance Institute. The analysis extrapolates from the plans of 14 of the largest insurance providers, which have announced combined refunds of $8.1 billon.

Cohen says it’s too early to tell whether the drop in claims will fully offset the pledged rebates. That will depend in large part on how long business and travel restrictions last, as well as the demographics and actions of those affected.

Low Mileage

The reduction in claims jibes with that of travel trends over the last month since large-scale business closure and stay-at-home policies have been enacted.

For the fourth week in a row, travel in the U.S. declined from both the same period in 2019 and from the preceding week this year, according to Washington-based data specialist Inrix.

For the 7-day period ending April 10, year-over-year personal travel was off 48%. But the decline seems to have plateaued, with average daily volumes falling:

• 23% for March 14-20
• 42% for March 21-28
• 47% for March 29 to April 3

All states but one, Wyoming (24%), had declines of more than 30% during the most recent period (April 4-10).

Travel also has fallen, although at a much lower level, across the board for both local commercial trucks and long-haul trucks. The former was off 16% for the most recent week, while the latter was down nearly 10%.

For the full year, overall miles traveled in the U.S. is projected to decline 11%, according to CCC Information Services, which also supplies software to handle insurance claims.