Car Insurance Claims Statistics

Many people complain about the cost of car insurance, but if you think that your costs are high, you should take a look at what insurance companies pay out every year in claims.

Car insurance claims statistics put things into perspective, showing the dire need for insurance coverage to protect you from any number of perils.

Car insurance claims amount to several billion dollars every year. Without insurance coverage, we would be a land in crisis. (For more information, read our “How to Win a Car Insurance Claim“).

Most of us do not have the money to pay the medical bills and repair bills from an accident, so we must rely on insurance coverage to pick up that tab. Consider the payouts that insurance providers make the next time you complain about the cost of coverage.

If you want to ensure you’re fully covered, enter your ZIP code above and compare at least three to four policies today!

Accident Claims

Claims for an accident cost so much more than just the actual costs of repairs. Factor in medical care, damage to surrounding property, loss of productivity, and similar costs, and you can see that the cost of auto accidents in the U.S. is sky-high.

The Rocky Mountain Insurance Information Association (RMIIA) cites a few different studies to come up with a cost for accident claims.

For instance, the Centers for Disease Control put the total cost of car accidents in 2010 at $99 billion.

A 2008 study by the Automobile Association of America put the cost at $166.7 billion, factoring in the loss of quality of life.

The RMIIA cites a source that contends that roughly half that cost is paid by the insurance company. Another quarter of the costs are paid by the victims of crashes, and the remaining quarter is paid for by:

• City, municipal, and federal sources
• Health providers
• Other third parties

The RMIIA also cites another astounding statistic — more than ten million crashes go unreported every year.

The statistics for the total cost of an accident would be even higher if all of those accidents were reported.

The Insurance Information Institute offers charts for collision losses per year. They show the average losses per claim from 2008 to 2010 varies from $3,800 to $4,400 for cars, minivans, trucks, and SUVs.

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Storm Claims

Storms occur in just about every state in the U.S., though some states have it much worse than others.

According to a partnership between the III and Munich Re, statistics show that the 2012 severe storm season has not caused nearly as much damage as 2011, though the statistics are near the normal range.

Damage from wind, hail, tornados, and hurricanes are higher in the area of the country east of the Rockies.

The U.S. also suffers higher overall insurance losses from storm damages than any other country, mostly owing to tornados and hurricanes.

So far, the top five costliest natural catastrophes of 2012 all occurred in the U.S.

Each was a severe storm with tornados, and the overall cost of those five events exceeded $5.8 billion. According to the National Weather Service Forecast Office, hail alone creates $1 billion in damages every year.

Catastrophe Claims

https://www.youtube.com/watch?v=g6vAbFu4uPk

While storm damage is part of catastrophe claims, it is such a large chunk that it can make up its own category. Catastrophe claims also cover damage from earthquakes, tsunamis, flooding, and wildfires.

According to the RMIIA, a storm or other natural event is termed a catastrophe once the cost of the damages, or estimated cost, has reached $25 million.

According to information from the III and Munich Re, a mild winter has limited flooding, and there have been no damaging earthquakes in the first half of 2012.

About two dozen wildfires and a handful of winter storms caused damage, but the bulk of the damage in 2012 has been from storms.

Together, tropical storms, hurricanes, and tornadoes cause almost 75 percent of the losses in a catastrophe, according to the RMIIA. Here are the loss and damage statistics for other types of catastrophes:

• Winter storms  – 7.4 percent
• Terroristic events – 6.8 percent
• Earthquakes and mudslides – 5.1 percent
• Wind, hail, and flooding – 4.1 percent
• Fire – 2.2 percent
• All other perils – Less than 1 percent

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Theft Claims

Statistics related to theft show the need for comprehensive coverage, and why you should be glad that your finances do not mirror those of an insurance company’s!

According to the Federal Bureau of Investigations (FBI), in 2009, nearly 800,000 auto thefts were reported.

While theft of a motor vehicle includes buses, scooters, motorcycles, and snowmobiles, cars made up almost 72 percent of the total stolen vehicles. However, not all thefts result in a claim to an insurance provider.

The average cost of the stolen vehicles, according to the FBI, was $6,505.

Thankfully, auto theft rates are on a downward trend, but that statistic does not help the individual who has had his or her vehicle stolen. Without comprehensive coverage, the loss of a car, truck, or SUV will be paid for out-of-pocket by you.

Insurance companies and experts recommend that you take steps to lower your chances of being a victim of car theft. Anti-theft devices such as car alarms, recovery systems, and VIN etching can all deter thieves and usually get you a discount off of comprehensive coverage.

Parking your vehicle in a locked garage or secured parking lot is also recommended and can also help you save on your premium.

Some states have enacted special programs, such as NY State’s Combat Auto Theft (CAT) Program, which gives police officers permission to pull over a vehicle with a CAT decal if it is on the road during the wee hours of the morning.

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Medical Claims

Medical claims from accidents also seem to be on the rise, according to a report released by the Insurance Research Council. According to the research, while costs had been increasing per claim for bodily injuries, the frequency of such claims had been falling.

However, recent 2011 data showed an increase in frequency as well.

The research points to PIP coverage in three large states that have no-fault insurance policies:

• Florida
• New York
• Michigan

All three states have Personal Injury Protection (PIP) issues on their hands as claim levels are soaring.

When claims go up, insurers pass that cost on to consumers. Many feel that fraud is partly to blame in the high PIP claim levels.

Another study by the IRC claimed that approximately one in three claims in Florida included padding of PIP costs and one in ten claims was totally fraudulent.

A further study found similar rates in New York, and another showed that Michigan experienced a 192 percent increase in PIP claims from 2002 to 2011.

Animal Claims

https://www.youtube.com/watch?v=wmciWfLgBOA

Another area that needs to be mentioned concerning car insurance claim statistics is those claims from hitting animals on the road.

While not many residents in downtown New York, Los Angeles, or Miami need to worry about a collision with a deer, it is a reality for most of the country.

Some areas even have concerns about accidents with elk and moose — much larger animals than the average deer.

According to information from the Insurance Information Institute, there were 1.09 million reported accidents with deer within a year’s time from 2010 and 2011, and the average claim damage amount per accident was more than $3,000.

States such as Iowa and South Dakota have high rates of the likelihood of hitting a deer, but West Virginia is the highest. In that state, drivers have a 1 in 53 chance of hitting a deer.

Even more startling, the III contends that collisions with deer cause about 200 deaths a year.

Fraudulent Claims

Unlike theft claims, fraudulent claims seem to be on the rise. Though there are coalitions and government committees formed all of the time to counteract fraud, the crooks just can’t resist an easy payday.

Insurance fraud as a whole reaches over $80 billion in the U.S., with scam artists playing both sides of the field. In auto insurance, claim fraud statistics come from one of two places.

First, there is padding a repair bill to recoup a deductible or gain a payout. The other type comes from staged accidents where accidents are planned to get a payout from an insurance company.

According to the Coalition Against Insurance Fraud, fraudulent claims for faked injuries added $4.8 billion to $6.8 billion to claims costs for insurance companies in 2007.

These fraudulent medical claims are often run by staged-accident rings, according to the Coalition. Participants stage an accident with an unwitting driver, and a treatment center in on the deal treats their fake injuries. The innocent driver’s insurance pays the bill.

As you can see from the other claims statistics, car insurance providers have enough on their plates without having to add billions of dollars in fraud. The sad reality is that the cost of such fraud is passed on to the average driver, increasing car insurance costs for everyone.

One thing that consumers can do to combat fraud is to report it. Too often people have a mentality that fraud is not their problem or that the insurance companies deserve it.

The reality is that it costs honest, hard-working individuals billions of dollars in car insurance costs every year.

If you’re looking to cut down on auto insurance costs and yet have better coverage, enter your ZIP code below and start comparison shopping today!

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