CCC Auto Claims Snapshot – December 2020
At the beginning of 2020, the economy was strong, unemployment rates were low, congestion levels were high in many urban areas, and miles driven continued to grow. Auto accident and claim frequency had started to flatten, but average vehicle repair costs continued to rise. And then the pandemic. In response to rising diagnoses, hospitalizations, deaths, and immense uncertainty, many states began issuing shelter-at-home orders in mid-March. All but essential and frontline workers sheltered at home; many companies furloughed or let employees go, while those that could have their employees work remotely, quickly set them up to do so. Daily trips and miles driven in the U.S. plummeted, and auto accidents and claim counts followed suit.
Repairable appraisal counts for the full calendar year were down -21.3 percent versus CY 2019; when excluding comprehensive losses, repairable counts were down -26 percent for the full year. After plunging -35 percent in Q2, repairable appraisal counts improved to -20.2 percent in Q3 and to -19.7 percent in Q4, with bad weather in many parts of the U.S. helping to counter decline in volume due to less driving, particularly during rush hour. Non-comprehensive repairable appraisal counts however reversed course again in Nov’20 and Dec’20, as the CDC recommended people forgo holiday travel, and a third wave of the virus drove up new COVID-19 cases, hospitalizations, and fatalities. Even numerous winter storms with lots of ice failed to lift accident counts in December, since many drivers were off the roads altogether, working remote and doing much of their holiday shopping online.
As we enter 2021, several vaccines have been approved, and while vaccinations are occurring, they are not occurring at the speeds desired. Yet most analysts predict the second half of the year will see strong recovery, particularly if the virus can be better brought under control, and more government aid is provided. So, while 2020 saw a never-before seen drop in vehicle accidents and claims, as the economy slowly re-emerges, we expect to see 2021 volumes also recover, perhaps reaching 2019 levels later in the year.