From Bloomberg, January 25:
Rates in the US have risen 37% since January 2020 as repair tabs for high-tech, sensor-laden vehicles have soared.
Not that long ago, repairing a car after a crash was pretty straightforward: Replace damaged parts, pound bent metal back into shape, touch up the paint and send the driver on their way in a vehicle that looks new. But today’s autos are so loaded with technology and built with such specialized materials that repairing even a minor fender bender can be a tedious and expensive exercise in both computer science and engineering.
“It’s the complexity of vehicles these days,” says Ben Clymer, who co-owns a chain of body shops in Southern California. “Repairing a base model Kia is nothing like it was just a few years ago. It might have 10 different computers and all kinds of sensors.” All that complexity, combined with rising prices for parts, Clymer says, “really creates the perfect storm for higher repair costs.” It’s driving up auto insurance rates at the fastest pace in almost a half-century.
The average repair bill for a traditional vehicle today runs $4,437, according to auto insurance processing company CCC Intelligent Solutions. For an electric vehicle, the average fix is 49% higher, or $6,618, thanks to their added tech gadgetry and the special handling required to work with their electric powertrains.
Insurers—who watched the average collision insurance claim soar 64% from 2018 to 2022, to $5,992, according to the Insurance Information Institute—have moved to offset the higher repair costs by aggressively hiking drivers’ premiums.
The cost of auto insurance in the US rose more than 20% in 2023, the biggest annual jump since 1976, data from the US Bureau of Labor Statistics show. Rates are up 37% since January 2020, adding to an affordability crisis caused in part by the price of cars surging about 30% in that same time frame, to almost $49,000 on average, according to research group Cox Automotive Inc....
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