Auto Loss Cost Trends 2019 Update

January 2020

In the latter half of 2013, personal auto insurance carriers began to notice an uptick in property damage liability and collision frequency. Subsequent loss cost experience has varied in frequency and severity, and by coverage type, region, demographics, weather patterns, quality of road maintenance, congestion level and other factors. In response, industry partners banded together to analyze these trends. Using publicly available data from the Federal Highway Administration, Bureau of Labor Statistics, the Census Bureau, and other sources, an analysis group is searching for explanatory variables correlated with these losses. These reports update the reports previously published in January and September 2018.

The key findings in bodily injury are:

Congestion has a strong positive relationship with loss cost and frequency
Old and young drivers both have negative relationships with loss cost and frequency in tort states.

The key findings in collision are:

Frequency has a strong annual seasonal pattern, with a peak in the first quarter
Severity has increased over time more rapidly than inflation

The key findings in comprehensive are:

Costs are largely driven by weather frequency (hailstorms, tornados, and wildfires)
Costs are also impacted by whether a state requires low- or zero-deductible windshield replacement

The key findings in personal injury protection are:

Congestion has a large impact
The state of Michigan is a large outlier

The key findings in property damage are:

Michigan is again a large outlier
Loss cost is correlated with urban miles travelled
Frequency and severity are correlated with congestion, urban road miles, and personal income