CCC Crash Course Q2 2024: Severe Weather Impacting Repair, Motor Insurance

The body repair and motor insurance industries have been forced to prepare for an uncertain future due to the expanding geographic impact of extreme weather, according to a new study by CCC Intelligent Solutions. The company’s latest ‘Crash Course’ report also said the two industries are adapting to new patterns of operation as repair times and costs rise significantly due to storm-related damage.

According to CCC, hail-related motor claims rose to 11.8 per cent of all comprehensive claims in 2023, up from nine per cent in 2020, with average repair costs for hail-damaged vehicles increasing by 15 per cent over the past three years. Hail claims are, on average, 21.7 per cent more expensive to repair than the average comprehensive claim and 25.6 per cent above the average repairable claim.

“Extreme weather events are increasing in severity, becoming major disruptors in the auto claims and repair industry,” said Kyle Krumlauf, Director of Industry Analytics at CCC and co-author of Crash Course. “Our Q2 report delivers critical insights, showing that the frequency and severity of storms are not just a seasonal issue but a persistent challenge that demands strategic planning and swift adaptation from industry players.”

Key findings of Crash Course Q2 2024 include:

  • Record storms and increased costs: The surge in billion-dollar weather events has led to higher claims costs and longer repair times. A case study in the report highlights Hurricane Ian’s impact in 2022, where comprehensive estimates tripled in affected states and increased nearly sevenfold in Florida.
  • Geographic shifts: The migration of populations to hurricane and hail-prone areas like Florida, Colorado and Texas intensified the impact on insurers and repair shops, leading to higher volumes of claims and stressing the existing repair infrastructure.
  • Vehicle repair costs rising: The average total cost of repair (TCOR) increased 3.3 per cent in Q1 2024 compared to Q1 2023, with labour rates and parts costs contributing to the rise. Q1 2024 had significant improvement in repair cycle times, with vehicles entering repair shops six days sooner compared to Q4 2023.
  • EV repairable claims growing: EVs accounted for 2.4 per cent of all repairable claims in Q1 2024, up from 1.6 per cent in Q1 2023. The average repair cost for EVs is 46.9 per cent higher than for non-EVs, primarily due to higher labour costs. For vehicles three years and newer, the average repair cost for EVs is 19.5 per cent more than non-EVs.

Previously published annually, Crash Course is being released quarterly in 2024 to provide more frequent updates on key trends and insight.