Are Car Accidents Driving Higher Insurance Costs For Arizona Drivers?

Are car accidents driving higher insurance costs for Arizona drivers?

This year is already shaping up to be a record-breaking El Niño influenced year. With over three feet of snow falling in the Washington DC area in one day, other areas of the country such as the south and southwest are experiencing wetter weather and more severe and damaging storms.

These extreme weather conditions could contribute to an increase in car crashes which will certainly have an impact on the wallets of drivers everywhere, even Here in Tucson Arizona. Compounding this situation even further, these extreme and frequent weather events come at a time when the number of auto insurance claims are rapidly increasing and auto body repair claims are becoming more expensive. These conditions all come to boil in the one area that matters most to Arizona car insurance customers, the cost of insurance.

For a while now, we have noticed both with our customers at Orielly Collision Centers, and in industry journals and news, that claim severity or claim costs associated with auto accidents have been climbing steadily over the past decade. We all know what claim costs means – your repair bill, but claim severity is the amount of damage a vehicle needs to be fixed in order to be safe to drive again. Today’s cars as we have said before, are far more sophisticated, technologically advanced and thus, more expensive to fix. The materials are more exotic and require more specialized equipment and training for repair. The parts are more advanced and also more expensive. Cars today have sensors and computers everywhere, and even a simple fender bender can now demand a higher claim amount just to repair the car. Body shops must use advanced diagnostic tools that require specialized training by technicians, which increases labor costs.

I’m addition, medical care costs for post-collision health care have increased. On average, insurance claim costs for bodily injuries rose 42%, and collision coverages are up 17% during the past decade. Across the board, car accident related costs are at all-time high.

Until recently, you probably did not see much of a monthly car insure rate increase as the slow and steady increase in claim costs had been offset by a decline in the number of claims filed. This helped keep insurance rates fairly stable for consumers. This element of the equation is changing now. Accident frequency is starting to show an increase, which is pushing costs up and putting pressure on insurance rates for consumers.

So why are auto collisions on the rise?

Insurance industry experts point to several different factors that combined are contributing to a spike in automobile accidents. Number one on the list is traffic congestion. Data suggests that traffic congestion, either independently or in combination with other factors, is the likely cause of the increase we are seeing. The more cars on the road, statistically, the more chance for a collision even with the safest drivers.

Geographically speaking, there are some common threads among the states that have seen the largest increases in accidents. These include such factors as traffic congestion, distracted driving, increase in miles driven and changing demographics, particularly more senior or young drivers. These factors have traditionally affected the number of accidents.

The evidence is also indicating that technologies designed to reduce a major problem can actually lead to the increase in small problems. Take for example the rise of red light cameras. Data show that red light cameras have reduced the frequency of people running red lights. This has led to a reduction in the number of T-bone collisions at intersections which historically result in some of the most severe crashes and injuries. This is a positive statistic, but it has also created a situation where the frequency of rear-end crashes as drivers stop abruptly to avoid a red light camera ticket and the vehicles following them cannot stop in time.

Increasing public awareness, driven by education from groups such as the Insurance Institute for Highway Safety, with their much-publicized crash test ratings, have created a demand for increasingly safer cars. Such public demand has forced the development and implementation of collision avoidance technology. The hope is that these technologies, one mainstream, with significantly if not eliminate completely low-speed accidents that occur mostly in dense and even slow moving traffic.

Insurance companies have always sought put ways to protect the public if they get in an accident by advocating for safe repairs and protection from fraud and abuses of the medical and legal systems.

There are other important consumer protections that can also impact the cost of auto accidents. Currently, many carriers work with auto body and glass repair shops to ensure that consumers receive quality repairs after an accident. Consumers and their insurers have a high stake in making sure vehicles are properly repaired. Through the existing relationships insurers have with shops, they can provide consumers with guarantees on the work, often for as long as the policyholder owns the vehicle.

Being able to maintain these relationships with auto body repair shops that have a track record of providing cost-effective, high-quality repairs, like O’Rielly Collision Centers, ensure that properly repaired cars are returned to the roads which helps promote safety for all motorists.

So how does an Arizona driver handle increased car insurance costs?

Policymakers must remain focused on strategies and public policy solutions that can help reduce the number of automobile accidents and the associated costs that impact drivers. The first step is taking a realistic look at the data trends and the external trends that are working together to drive up insurance costs. This approach will keep motorists safe and contribute to lower insurance costs for all Arizona drivers.

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