Mitchell: Deductibles rise as consumers scrounge for extra cash
May 4, 2010—In a bid to save cash every month, consumers are opting for higher deductibles on their insurance policies, according to a report release_notesd Tuesday by Mitchell International Inc.
In its second quarter Industry Trends Report (ITR), Mitchell stressed the importance of strong customer service in collision repair shops to combat the rise in insurance deductibles, which could prompt consumers to opt out of repairs. So-called “light-comprehensive” deductibles are rising at a 160 percent faster rate than collision deductibles, according to the report.
"Vehicle owners are more willing to absorb more of the financial impact of a potential comprehensive claim versus the risk of a possible collision claim," said Greg Horn, Mitchell’s vice president of industry relations. "This also falls in line with the trend identified in our previous ITR of drivers completely dropping their first-party coverage on older vehicles and causing more new vehicles to shift into insurers' first-party coverage pool-more than was the case prior to the recession."
"The data definitely points to major shifts in the culture of the American driving public, with a corresponding impact on how collision repair industry participants will have to realign business practices and priorities in the future," Horn added.
Mitchell’s study used insurance deductible data from 2003 through 2009 for collision and comprehensive (excluding glass-only) losses. The study also showed that European nameplate vehicle owners consistently choose higher deductibles more than other nameplates origins, most likely in an effort to lower their monthly premiums in a still struggling economy.
Read the full report at mitchell.com/mitch/pubs/industrytrends.asp