Toronto, Ontario — Crash Course (CCC) recently released its Q2 2024 report which indicates that hurricanes and severe convective storms have a considerable impact on the auto insurance and collision repair industries, resulting in an increase in damages and economic loss, as well as causing 94 percent of all comprehensive claims estimates for drivable vehicles included PDR over the last two years.
The goal of this report is to help the automotive industry navigate the 2024 hurricane season, using exclusive information based on CCC’s aggregated historical claims and repair data. For the CCC, these insights allow carriers and repairers to validate their current strategies, make informed adjustments and enhance their preparedness for severe weather events ahead.
According to the report, since 2021, hurricanes have specifically amassed over $180 billion in damages and economic loss in the United States, including over $1 billion in 2021, $60 billion in 2022, $116 billion in 2023 and $3.5 billion in 2024. Beyond the obvious financial losses, these severe weather events can potentially overwhelm the operational capacities of state or regional property and casualty claim teams, auto repairers, salvage and tow providers, rental companies and more, the report notes.
The costliest hurricane, Hurricane Ian in 2022, tripled CCC’s comprehensive estimate volumes in Georgia and South Carolina, and almost seven times for Florida. With the mass influx of claims comes the immediate need to effectively triage, assign, appraise and move vehicles. Because of the higher proportion of potential total losses and sheer volume of inspections that need to be completed, carriers increase their reliance on staff appraisers – many of whom are part of a catastrophe team – and independent appraisers (IA).
Prior to the hurricane, IA handled approximately eight percent of appraisals, direct repair programs (DRP) handled approximately 21 percent and staff appraisers handled approximately 58 percent. For appraisals around the time of Hurricane Ian, DRP appraisal contribution decreased to six percent, while IA’s increased by over 10 percent to 18.5 percent, and staff appraisers increased to almost 65 percent of appraisals.
Moreover, the report further notes that an indication of hail-related damage is claims that include paintless dent repair (PDR). In 2023 alone, 19.4 percent of comprehensive claims included PDR and 80 percent of claims identified as “hail” included PDR. Throughout 2023, PDR was included on 19 percent to 35 percent of repairable comprehensive estimates.
PDR claims use an average of 47 percent less parts than non-PDR claims. PDR claims are more likely to be on drivable vehicles and require less repair time. Over the past two years, 94 percent of all comprehensive claims estimates for drivable vehicles included PDR, while only 65.9 percent did not. The average cycle time for drivable PDR claims was only 6.4 days, while drivable non-PDR claims averaged 11.1 days. PDR claims are likely to have less time needed for teardown, part replacement, paint time and diagnostic.
Every year through May 2024, CCC data indicates a 1.6 percent increase in vehicles being declared total losses by insurance carriers in 2024 relative to 2023. This is primarily due to the continued erosion of used vehicle values and an increasingly mature vehicle pool, as over 73 percent of valuations across all loss categories are for vehicles seven years and older.
According to the report, an increased total loss frequency will, in turn, decrease the ratio of repairable vehicles. Higher physical damage severity losses, which might have been repaired a year ago, are more likely now to be totaled, increasing ship capacity and lowering overall cycle times.
To read the whole report, click here.
The post Preparing for Hurricane Season: CCC Q2 2024 report reveals 94 percent of all comprehensive claims estimates for drivable vehicles included PDR over last two years appeared first on Collision Repair Magazine.
