Market Data From 2020 Shows COVID-19's Impact on Auto Insurance
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Most businesses, including the car insurance industry, felt the economic impact of 2020 with roller-coaster highs and lows due to the COVID-19 pandemic. Car shopping trends fluctuated as automakers struggled to keep up with changes in consumer behavior.
The auto insurance industry was particularly hard hit by the pandemic. Car insurance companies were forced to change the way they processed claims and quoted new policies to meet the demands of a struggling economy.
A newly released report from LexisNexis Risk Solutions highlights consumer trends from 2020 to help insurance companies make better business decisions in the current market. This data will also give you insight behind any insurance rate changes you might see moving forward.
The car insurance industry has seen a lot of turbulence | Twenty20
COVID-19 impacted auto insurance and driver behavior
LexisNexis recently released its 2021 U.S. Auto Insurance Trends Report that looks at auto insurance trends in 2020. Data about driving behaviors, the way consumers shop for auto insurance, and claims processes are reflected in the report.
This year’s analysis is unique because it contains information about how insurance companies responded to the COVID-19 pandemic and the overall impact it had on the industry.
The vice president of LexisNexis said, “While the evolving impact of the pandemic is still unknown, understanding these trends and evaluating their projections can help insurers make better business decisions and more confidently prepare for the future regardless of unexpected market turbulence.”
LexisNexis pointed out that consumer behavior and industry-wide business practices varied drastically from the typical patterns associated with car insurance processes. They said this was “largely due to the influence of COVID-19.”
Dangerous driving behavior has increased
Although there were fewer drivers on the road, dangerous driving increased. There was a 10% increase of high-speed driving behavior in mid-March compared to 2019 and it stayed at this rate for the rest of the year.
There was also an increase of DUI violations, especially among younger drivers. The data shows a 50% increase of recorded violations in March and April of 2020. With fewer cars on the road, there was a decrease in traffic collision claims. However, the collisions were slightly more severe compared to 2019.
The amount of drivers shopping for car insurance fluctuated heavily throughout 2020. But by the end of the year, LexisNexis reported that 5.3% more people were shopping for car insurance compared to 2019.
How did car insurance companies try to help consumers?
According to U.S. News & World Report, “early in the pandemic, most insurers have offered payment relief, halted insurance cancellations, and provided online claims processing for their policyholders.” In addition, many companies “provided partial premium refunds since a majority of their policyholders reduced their driving due to the COVID-19 outbreak.”
Car insurance companies are adjusting the way they operate as pandemic restrictions are lifted. You might see your premiums increase as more people start driving again. There are other ways to find cheaper car insurance that meets your changing needs.
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