The automotive industry is in the early stages of fundamental transformations that are beginning to radically change both frequency and severity of auto claims. Rapid adoption of new technologies, materials and more powerful engines are driving these changes. Hybrid cars are beginning to reach critical mass. Electric powered vehicles like the Nissan Leaf, Chevy Volt, and Tesla Electric Vehicles are about to hit showrooms around the country.

Collision avoidance systems using radar and sensors are already in some high-end luxury cars and will inevitably move into the mainstream market. Event Data Recorders (EDRs), reporting on driving habits and usage along with accurate GPS-based location tagging, are becoming mainstream. New materials, components and crumple zones have altered injury and severity profiles.

Examples of impacts:

• Recent claims data on hybrid cars already reveals trends that are not always intuitive or expected. Industry Trends reports that hybrid car claim severity is 6.5 percent higher than the average gas-powered vehicle claim. A major contributor to these higher claim costs is the availability of original manufacturers’ parts versus aftermarket repair parts.
• The Highway Data Loss Institute notes surprisingly that hybrid electric vehicles (HEV) typically have higher collision claims frequencies than their internal combustion engine (ICE) counterparts. HEVs are more likely to hit pedestrians and cyclists due to their almost-silent operation when running only on battery power. Best Review reports that Toyota Prius owners receive 65 percent more traffic tickets than ICE vehicles.
• HEVs and EVs also introduce new hazards in accidents in terms of high voltage components and compromised battery packs. Battery pack location is also a significant variable. When a battery pack is damaged, unlike your current car battery, it is not repairable. It has to be totally replaced and almost inevitably requires dealer network support.

• New components such as LED lights add considerably to the cost of repairs. A headlamp employing LED technology can run over $1000 to replace on even entry-level luxury vehicles.

Sales Trends