Economic recovery, cheap gas prices, more vehicles on the roadoverall, and more miles driven per vehicle have been attributed tomuch of the increase in auto accident/claim frequency coming out ofthe recession, particularly in 2015 and 2016. 

Overall miles driven in the U.S. are up 4.2 percent nationallywhen comparing the rolling 12 months ended May 2016 to the lastpeak set during the rolling 12 months ended November 2007, says theU.S. Departmentof Transportation.

Year-over-year miles driven are up 3.1 percent for the rolling12 months ended May 2016 versus the same period in May 2015. Somestates are seeing larger increases than others, with all but twostates up year-over-year (see Figure 1).

What can often get overlooked, however, is just how much of arole Mother Nature has played in driving up auto claim counts,especially in the first half of 2016.

Figure 1. Miles driven across the countryhave increased 3.2 percent nationally. (Source: CCC InformationServices Inc.)

Severe weather caused first quarter catastrophe losses of$4.8 billion. (Photo: Shutterstock)

Weather raises risks

A recent report issued by PCI/ISO on Q1 2016 financial resultsof U.S. property/casualty insurers reports severe weather and theresulting insured losses helped produce a 26.6 percent drop in U.S. property/casualtyinsurers' net income. Significant hail in Montana, Texas, and otherstates added to the highest first-quarter catastrophe losses in theU.S. since the 1994 Northridge earthquake. According to the PCI/ISOreport, Q2 2016 direct insured property losses from U.S.catastrophes were $4.8 billion, versus the Q1 2015 losses of $3.6billion, and $3.1 billion higher than the first quarter directcatastrophe loss average for the previous 10 years.

Analysis of customer claim count data from CCCInformation Services Inc. reveals significant weatherevents in many parts of the U.S. led to large increases in lossesfrom either hail or water (see Figure 2). In Q2 2016, 5 percent ofthe 6.9 million losses reported by CCC nationally resulted fromwater or hail, up significantly from only 1.2 percent in Q22015.

Figure 2. Significant weather in March andApril increased claims by 16.5 percent. (Source: CCC InformationServices Inc.)

Many states saw the largest losses in March and April, withstates like Montana swinging from 1 percent of all losses fromhail/water losses in Q1 2016, to 35 percent for Q2. Detailed dataon individual weather events recorded by Aon Benfield include thefollowing examples.

Figure 3. From the Pacific Northwest to theSoutheast, hardly any portion of the country was spared from thesevere weather. (Source: CCC Information Services Inc.)

Week ending Mar 18:  On March 13-17,the Southern Plains and Southeast experienced severe thunderstormsthat brought flooding, hail, damaging winds, tornados andconvective storm damage — especially in parts ofLouisiana, Arkansas, Mississippi and east Texas. 

The Pacific Northwest also sustained damage from flooding andstorms. On March 15, Illinois, Iowa, and Missouri, saw significantthunderstorms and hail reported as large as baseballs.Thunderstorms on March 16-17 across Texas and Oklahoma broughttennis-ball size hail in the greater Dallas-Fort Worth, Texas,metro area during morning rush hour.

Week ending March 25:  On March 23,thunderstorms hit from Iowa to Southern Texas, with at least 6states reporting significant hail damage. The Dallas-Fort Worth,Texas, area saw golf ball-sized hail, damaging about 50,000vehicles. There was similar damage in Oklahoma, Arkansas andMissouri. A March 24th storm moved east from the Ohio Valley to theGulf Coast with Mississippi, Alabama, Tennessee, Kentucky andIndiana being the hardest hit. The two storm events in Texas on Mar17-18 and Mar 23 are each individually expected to enter the Top 20costliest insured loss event for the state of Texas since 1950according to Aon.

Week ending April 1:  March 30-31there were severe convective storm across the eastern U.S. thatincluded thunderstorms, hail, damaging straight-line winds; thePlains, Midwest and Southeast were all affected. More thunderstormswere reported on Mar 30-31 from the Central Plains to the Midwestas tornadoes and hail hit Oklahoma and Kansas, and more hailpummeled Dallas. The storm then moved across the country, creatingflooding and thunderstorms in Tennessee, Kentucky, Mississippi,Alabama, and Louisiana.

A La Niña event could have a major impact onweather across the country this fall. (Photo: iStock)

Loss volume grows

Subsequently, when comparing increases in claim count with andwithout comprehensive losses included, the swings in volume growthby state vary significantly (see Figure 4). Nationally, CCC reportsrepairable vehicle appraisal counts up 6.5 percent year-to-datethrough June 2016 compared to the same period in 2015; whencomprehensive losses are excluded; however, that same count was uponly 2.3 percent. 

There was a much larger increase in vehicles flagged a totalloss, as weather events and an older vehicle fleet still on theroad led to more vehicles being non-repairable. 

Related: XL says catastrophes cost $240 million, led byCanada fires 

Nationally, the percent of vehicles flagged total loss ornon-repairable was nearly 17 percent by mid-year across all losses.For comprehensive losses, only 13 percent were flagged a totalloss, while collision and liability losses saw nearly 18 percentflagged as a total loss. Each loss category group has seen about aone percentage point increase in total loss frequency so far thisyear versus mid-year 2015. 

Significant swings

Total loss volume in certain states also saw significant swings.For example, devastating storms in late June led to flash-floodingin West Virginia, causing damage to up to 5,500 homes, 125businesses and swaths of the infrastructure said Aon. Total lossvaluation counts were up 62 percent for the first six months of2016 from the same period in 2015. When comprehensive losses areexcluded, however, those same counts were up only 7.8 percent.

Mother Nature has played a major role driving up claim counts sofar this year, as a very strong El Niño event has hadsignificant impact on weather patterns across the country. As wehead into the late summer and early fall, the developing La Niñawill strengthen and become the dominant driver of North Americanweather.

The WeatherNetwork predicts the warm weather pattern for the summer willpersist into fall, driving up tropical storm activity in theAtlantic Basin. Seven hurricanes or tropical storms over the last10 years have caused at least one billion dollars of damage in theU.S. Five of the seven came during the La Nina years of 2008 and2011 according to CNN. And, unfortunately, the risk for a strong LaNiña is enhanced following a strong El Niño, which we had last year— so not much relief may be in sight anytime soon.

Susanna Gotsch is the lead analyst for CCC Information ServicesInc. Contact her on Twitter @ccc_susanna.