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- The coronavirus pandemic has meant fewer people on the road, which has logically led to fewer crashes and thus a drop in insurance claims.
- It’s still too early to have a lot of hard numbers, but one insurance tech company says personal auto claims could be down as much as 50 percent and that March could see the lowest number of claims in half a century.
- In California, which has reported some data, the number of crashes is down 43 percent so far in 2020 compared to 2019.
Auto insurance companies have been quick to tout some of the money they’re giving back to customers during the COVID-19 pandemic. Turns out, there’s good reason for them to return some cash right now. With fewer people on the road, accident claims are down. Way down.
Claims for personal vehicles are currently down around 40 or 50 percent, with commercial vehicle claims down around 30 or 40 percent. That’s according to Andy Cohen, chief operating officer at the insurance technology company Snapsheet, speaking to industry analysts. Cohen said his numbers were based on observations of data from the 85 insurance carriers Snapshot works with and are not hard calculations, since it will still take time to figure out the actual rate of decrease.
The exact rate will be determined by a number of factors, and we simply do not yet know how they will play out. The big one is the length of the stay-at-home orders. Then it depends how well people follow those orders and in which way the orders are lifted. There are anecdotal reports that the number of crashes happening these days are higher than one would expect given the reduced number of vehicles on the roads, which could mean outliers in the eventual data. Whatever the actual rate is, Cohen said that the total number of claims filed in March could be the lowest in 50 years.
In California, the drop in traffic and thus accidents has led the state’s insurance commissioner, Ricardo Lara, to order that insurance companies offer premium discounts for March, April, and maybe also May. The order applies to insurance coverage “where the risk of loss has fallen substantially,” according to the San Francisco Chronicle. That includes both private and commercial vehicle insurance.
The state does have some hard numbers to back this order up, the Chronicle reports. Between March 1 and April 12, data collected by the state highway patrol found that crashes in the Bay Area were down 48 percent compared to the same time period in 2019, and only one fatal crash reported to the CHP, compared with 22 in 2019. The statewide crash total for the year to date is down 43 percent through April 12, with fatal crashes down 84 percent.