Insurance Agencies & Brokerages NAICS 524210

Dec 18, 2025 - More Complex Cars Reshaping Auto Loss Claims

• Auto collision trends in 2025 are reshaping loss costs and claims operations for auto insurers, according to CCC Intelligent Solutions. Elevated vehicle prices and interest rates are keeping drivers in older cars longer, expanding and diversifying the insured vehicle mix and increasing exposure to higher repair complexity. Claims severity continues to rise as advanced driver-assistance systems, electronics, and mixed powertrains drive greater use of diagnostics, scans, and calibrations. Calibration frequency has surged from less than 1% of appraisals in 2017 to 23% in 2025, while nearly 70% of claims now include scans, adding cost and operational variability. Parts price volatility tied to tariffs and supply chain instability has further pressured claim payouts, even as overall claim frequency remains relatively stable. For insurers, these dynamics are extending cycle times, complicating estimating accuracy, and challenging traditional severity assumptions, reinforcing the need for updated pricing, underwriting, and claims management strategies.
• US natural disaster insured losses through the first nine months of 2025 remained high despite a surprisingly mild third quarter, helping push total global insured losses above $100 billion for the sixth straight year. The costliest US events were two major January wildfires near Los Angeles and multiple severe storm outbreaks, which together comprised a large share of the year’s loss total. There have been 16 billion‑dollar insured loss events globally so far in 2025, with 15 of them in the US. Severe convective storms alone cost insurers about $46 billion, marking the fourth‑costliest year on record for such events. Most losses occurred early in the year; the third quarter saw unusually low claims due to quiet tropical cyclone activity. Gallagher Re noted that although late‑season storms or an earthquake could still raise losses, overall 2025 insured losses may end below recent averages for the industry.

• The quiet 2025 Atlantic hurricane season, with no US landfalls and limited catastrophic events, has created challenges for insurance adjusters. While homeowners avoided major losses, adjusters faced a lack of deployable events, reducing opportunities for on-the-job experience and career growth. Seasoned professionals warn that this skill gap, combined with retirements of experienced staff (the “silver tsunami”), is weakening the industry. New adjusters are often left idle, some leaving the field or turning to public adjusting, while untrained “fill-in billers” are being deployed, sometimes leading to costly errors. Wildfires and severe storms in the U.S. have caused substantial losses but provided limited claims experience. The situation raises concerns about future readiness, mentorship, and the sustainability of the profession, especially as hype about quick, high-paying adjuster jobs misleads newcomers and undermines proper training and expertise.
• Several US states are considering implementing insurance price controls as a means to combat consistently rising premiums for property and casualty insurance. Illinois lawmakers are evaluating a bill that would grant regulators the authority to prevent insurers from calculating appropriate rates, effectively imposing government price controls on auto insurance. Similarly, Louisiana has empowered its insurance regulator to reject "excessive" premiums, while Michigan proposed a 10% reduction in auto insurance rates. In Georgia, a legislator introduced a bill to cap insurance rate increases at the inflation rate. These proposals aim to address affordability concerns but may lead to unintended consequences, such as reduced insurer participation and increased reliance on state-sponsored insurance mechanisms. Historically, price controls have resulted in market distortions, including shortages and decreased competition, as seen in California's insurance market, where stringent regulations led to insurers exiting the state.