Are rising deductibles driving severity trend?

Many consumers have raised their car insurance deductibles to cut expenses during this prolonged economic downturn. The issue is having a major impact on collision repairers, according to the new Mitchell Industry Trends Report.Like this article? Sign up to receive our weekly news blasts here.

While higher deductibles are good for the insurance industry as consumers shoulder a larger portion of their repair bills, the trend is not so good for repair shops. Some see a definite link between a very flat collision repair severity over the past six years and the rise in deductibles, according to Mitchell Industry Trends report author Greg Horn.

The report offers analysis and answers to questions such as: Are deductibles the most important factor contributing to changes in average severity for either collision or comprehensive claims? Is the rise in indexed actual cash value (which is running opposite of vehicle age), having a greater influence on the rise in repairable severity?

Click here to download the Mitchell Industry Trends Report.