CCC’s Recent Crash Course Report Underscores the Effects of Extreme Weather

CCC Intelligent Solutions released its Q2 2024 Crash Course report on June 25, 2024 which focuses on the impact of severe weather events, according to a news release.

The report, based on data from 300 million claims-related transactions and millions of bodily injury and personal injury protection (PIP) /medical payments (MedPay) casualty claims, highlights the increasing frequency and severity of storms. These are not just seasonal issues but persistent challenges that require strategic planning and swift adaptation from industry players, according to Kyle Krumlauf, director of industry analytics at CCC.

The report examines the expanding geographical impact of severe weather, forcing the auto insurance and repair industries to adapt to new patterns and prepare for an unpredictable future. It points to significant increases in repair times and costs due to storm-related damages. For instance, hail-related auto claims rose to 11.8% of all comprehensive claims in 2023, up from 9% in 2020. The average repair costs for hail-damaged vehicles have increased by 15% over the past three years.

Key findings of the report include:

• Record Storms and Increased Costs: The surge in billion-dollar weather events has led to higher claims costs and longer repair times. A case study in the report highlights Hurricane Ian’s impact in 2022, where comprehensive estimates tripled in affected states and increased nearly sevenfold in Florida.
• Geographic Shifts: The migration of populations to hurricane and hail-prone areas like Florida, Colorado, and Texas has intensified the impact on insurers and repair shops, leading to higher volumes of claims and stressing the existing repair infrastructure.
• Vehicle Repair Costs Rising: The average total cost of repair (TCOR) increased 3.3% in Q1 2024 compared to Q1 2023, with labor rates and parts costs contributing to the rise.
• Electric Vehicles (EVs) Repairable Claims Growing: EVs accounted for 2.4% of all repairable claims in Q1 2024, up from 1.6% in Q1 2023. The average repair cost for EVs is 46.9% higher than for non-EVs, primarily due to higher labor costs.
• Casualty and Medical Costs Continue to Rise: Medical treatment costs for auto claims are rising, with high-dollar procedures experiencing significant inflation. Uninsured and underinsured motorist (UM/UIM) injury claims increased by 44%, rising from 9.4% in Q1 2023 to 13.5% in Q1 2024, as households struggle with rising auto insurance premiums.
• Subrogation Trends: High turnover among adjusters is hindering subrogation efforts, leading to a 16% decrease in referrals. Carriers are increasingly using technology to streamline subrogation processes and improve recovery rates.

CCC Intelligent Solutions Inc. plans to release the Crash Course report quarterly in 2024 to provide more frequent updates on key trends and insights. The Q2 2024 report is the 30th edition of Crash Course. It can be downloaded from their website.

FenderBender’s CollisionCast recently released a podcast episode on the possible impact that climate change will have on hail and hail repair in the industry.