A new report indicates that the share of car insurance claims in which the vehicle was considered a total loss by insurance companies is on the rise.
Per a report from Axios, which cites data compiled by LexisNexis Risk Solutions, 27 percent of vehicles involved in a collision insurance claim were deemed totaled during 2023, an all-time high. With a higher share of vehicles deemed totaled, insurance rates are expected to increase by five percent this year across the nation, per Insurify.
According to the Axios report, the 27-percent total loss rate in 2023 was an uptick of one percent compared to a rate of 26 percent in 2022. The total loss rate has been on the rise for years now, with the data pointing to a rate of 24 percent in 2021, 21 percent in 2020, 20 percent in 2019, and 19 percent in 2018.
Axios states that part of the reason insurance companies are more likely to write off a vehicle is due to an increase in vehicle electronics, with advanced driver assistance systems like lane-departure warning requiring recalibration after an accident. In addition, repair costs have increased dramatically since the COVID-19 pandemic, including the cost of replacement parts, the time required to source replacement parts (and thus the time required by insurance companies to provide a loaner vehicle), and a dearth of loaner vehicles in general as a result of the microchip shortage and related production delays.
According to LexisNexis Risk Solutions senior director for claims, Frank Cesario, this has led to “almost a perfect storm” of factors, and as a result, insurers are far more likely to provide a replacement vehicle over repairing a damaged vehicle. This also leads to higher insurance costs, with Insurify indicating that the average annual cost for full auto coverage went up 15 percent in the U.S. last year.
Insurify also indicates that tariffs imposed by President Trump are also expected to increase insurance rates due to higher costs for vehicle imports and parts.
Comments
That’s what you get for arrogantly adding all these electronics features that few asked for, just to increase the MSRP even higher. Folks won’t be able to afford insurance and in a recession, nor the exorbitant payments (part of that is the owners fault for overbuying, yes). Fun times dead ahead.
You’re getting exactly what you’ve been wanting. Now suffer the consequences.
I would gladly buy a vehicle without an infotainment system (am/fm stereo is enough) you can also keep most of the other electronic gadgets too, I just need power steering, power brakes, and automatic transmission. Cruise, tilt wheel, and intermittent wipers are nice but not necessary. Same with power windows and seats, not necessary. How much less would that car cost? I basically just described my 2012 Silverado WT. It’s a great truck, I bought it new, only issue other that regular maintenance has been a thermostat and air bag recall. It now has 106k miles with no rust and is my daily driver. MSRP was $22.5k, with rebates and GM discount I took it home for $15,956.
I’m not surprised, especially with the costs associated with repairing the newer vehicles. Early last year, someone pulled out in front of me without looking…I slammed on the brakes and ended up tapping her minivan right above the front wheel going about 7mph. If I had another 5 feet, I would have missed her entirely. The cost to fix my ’23 Sierra Elevation? Almost $3700. I’m glad it was tacked onto her insurance, not mine. It doesn’t take much to total a car.
Tim. Those are nice trucks. Unfortunately I had a similar instance. Once it is reported, it goes on the Carfax and will slightly reduce the value because of that. Around 10%. No win for us.
To bad car fax is becoming less accurate and not always dependable and very difficult to correct
Here is the problem. Price of parts and availability of parts has gotten crazy since Covid.
Supplies dropped and prices increased.
It is not all the electronics in a car that are the problem. Much of it is the plastics and non shared parts.
I just got hit in the front of my truck. No sheet metal damage, no air bags. I was fully able to drive the truck home. Yet the bill is $10,000.
The only real metal is the bumper backer metal bar the rest was all plastic. The Grill $1000, Headlight $1000 and more.
Also the way cars are made to bend the uni bodies are near impossible to fix if bent to far and I have even seen some trucks get new frames as their Frames are bent but the body is not bad.
Costs have gone up and the difficulty of repair had gone up due to crash regulations and required equipment.
I’m still waiting for a grill for a Silverado that got it by a bird. Broke the grill. Again $1000 and even used in good shape was over $600. I could get another broken one cheaper.
Two other factors too. California fires as thousands of cars were lost and Hurricane’s. People building in areas that have had storms for centuries and now they thing it won’t happen? Floods destroy these cars today. The electronic and body control module’s are toast as are the wires.
Think about this… if the vehicle is totaled, the dealer will not have to supply a loaner vehicle. saves dollars there and the final answer is… if it is totaled you need to buy a replacement vehicle, hopefully from the dealer you just bought one from. Insurance goes up and the insurance company wins too. Almost sounds like collusion.
It is not collusion.
The dealers have nothing to do with insurance. Dealers also do not provide loaners.
The Insurance companies are required to provide a loaner till the car is repaired. They do factor this into the deal but most just pressure body shops and the person with the car to get it repaired in short time.
My body shop jumped me in line by a month and they are now a half a week over the completion date and I have had to make phone calls to extend the loaner and they have already called the body shop to try to get it completed.
‘s
The delay or lack of parts also have added to this to.
I know they had to find a new Canyon Head lamp and recently I had to really dig to find a OE quarter glass for the wife SUV. All most can find is just chines crap that did not fit right. I got lucky and found one on E bay as GM had none in the system.
” Greed is Good” so it says in the movies, and insurance companies will seek every opportunity to jump on that bandwagon.
In California, if the damage is 50% or more of the vehicle value. It is considered totaled.
The advantage of an older vehicle is the availsbility of used parts. One of my vehicles, whuch is eleven years old now, had its passenger side mirror hit by a Jeep. The new mirror was $349, but on eBay I got a replacement for less than $100. The only new cost was painting.
So drive carefully, keep your vehicles longer, spend less on repairs, and prevent rate
increases.
Not really. I have been looking for parts for older cars and the grills are all broken and they still want $500 for them and the glass quarter window I tried to get was never removed to where it could be reused. The rubber gaskets are one time use and difficult to remove.
Some times you get lucky but often it is still hard to find and expensive.
Why are we seeing results from twenty-twenty-THREE? Is it that difficult to know how many cares were declared total losses during the most recent calendar year? Seems like a pretty easy number to come up with, not something that takes a full year plus to determine
Most smaller new vehicles have sheet metal unibody frames that are made to crumple and are ver difficult to straighten. If you hit the front end hard, you’ve likely damaged to engine, transmission, drive shafts, and suspension components in addition to the sheet metal, grille, and composite lights. All of that plus labor is more than the car is worth. Back in the day, we bolted on new fenders, hoods, bumpers, and etc and straightened the frame if needed and painted it, and good to go!
Much of the problem is how they build them. To install an evaporator core in my Chevy Impala, you had to remove the whole dashboard including the console and steering column! In contrast, my 1977 Buick can have this same repair done all under the hood removing the top of the heater core, evaporator core box, so the Buick repair is about 3 hours versus about 18 hours for the Chevy. And chances of getting something wrong requiring a second visit to the garage go way up too! Lucky for me the dealership put a 25 year veteran mechanic with the proper training fixing my car. And a service contract covered it. This would have totally screwed my budget otherwise!
And the Buick is twice the car that the Chevy is.
Read where a very large % of expensive EV’s are totaled if frame or battery damage. The cost of all these expensive totals are being spread to us all regardless of our personal driving history. The state of MS “requires “ all car owners to have liability insurance yet we still have to pay for uninsured motorists on our auto insurance. What a joke!
I have progressive and pay $58 a month for 2 vehicles ! Im a responsible driver and obey all the rules of the road ! Its called defensive driving ! We need safer drivers not safer vehicles !
My daughter had a few year old Lincoln SUV thing that hit a pole at a relatively low rate of speed. She suffered minor injuries and the car looked pretty decent from the outside. However all the airbags went off and the car was totaled. I’m for safety but there is a limit on what can be “saved” when the economic factors are put into play. 27 air bags don’t make much improvement in vehicle safety, and yes, all the electronics add to horrendous repair expenses.
More opportunities for people that can repair and flip damaged vehicles.
The federal government has doled out 💩 loads of of money to local police in the name to fight terrorism since 9/11. For some reason, local and state police do not enforce the speed limit restrictions. Speed kills, in 2025, just like it did back in 1965 when that saying originated.