Feb. 1, 2010--The Insurance Research Council reported the number of uninsured motorists has risen to 16.1 percent of drivers on the road, according to Mitchell International Inc.’s first quarter 2010 Industry Trends Report.
Greg Horn, Mitchell International’s vice president of industry relations, says this is causing total loss insurance claims to decline.
The pool of older vehicles carrying first-party coverage is shrinking, Horn says. Older vehicles on U.S. roads are increasingly under-insured or not insured at all as drivers reduce or drop their coverage. This means that the owners of these vehicles make no total loss claim after a collision.
“Insurers are reporting a high percentage of policyholders dropping collision and comprehensive coverage on older vehicles in order to economize on their insurance expenses,” Horn said. The number of uninsured drivers exceeds 25 percent in some southern states, according to the Insurance Research Council.
The average age of vehicles on the road is nearly 10 years, the oldest average in U.S. history, according to Horn.
"Tough economic times will likely continue to spur the decrease in total losses that are paid for by collision coverage because the pool of older vehicles that has been so sharply reduced will continue to contract further,” Horn said.
Horn predicts total loss claims to continue to decline in 2010.
“People will keep holding onto their cars because of the still struggling economy, which will sustain high used car values, and decrease the pool of vehicles carrying first-party coverage,” he says.
Visit Mitchell.com for more details, and to view the full first quarter 2010 Industry Trends Report.
