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Auto insurers faced a difficult market in 2023.

Parts and labor shortages, storage costs, attorney involvement and increases in medical treatment costs all presented challenges.

The unsurprising result was increased severities across injury and material damage and another year of high costs for insurers.

Change in SeverityOverall, claim severities have steadily trended upward since the pandemic. Since 2020, bodily injury severity has risen 20%, while severity for all material damage coverages has increased 47% (Figure 1).
Another factor exacerbating a difficult claims landscape is adequacy of coverage. Rising bodily injury (BI) numbers raise serious concerns about the adequacy of minimum coverage limits for many drivers.

_{^{Source: 1. LexisNexis® Risk Solutions internal data 2. LexisNexis® Risk Solutions internal research and Bankrate}}

BODILY INJURY LIMITS REQUIRED IN THE U.S.²

43 STATES + D.C.: Minimum coverage limits of $25,000 or less

4 STATES: Minimum coverage limits of $30,000 (Maryland, Minnesota, North Carolina and Texas)

3 STATES: Minimum coverage limits of $50,000 (Maine, Michigan and Alaska)

Attorney Representation Increases

LexisNexis® Risk Solutions commissioned a market research study to learn more about third party claimants who hired an attorney in auto claims and to gauge overall satisfaction with the attorney experience.

The study found that following an auto accident, 85% of claimants were approached by one attorney. About 60% percent heard from two or more. Among the claimants who hired an attorney, 51% received a higher settlement amount.

_{^{Source: LexisNexis® Risk Solutions 2023 Market Research Study}}

Total Loss Claims

Total loss claims are some of the most difficult to resolve and continue to remain elevated, having increased 29% since 2020. In 2023, over a quarter (27%) of collision claims were deemed total losses.

To better understand the experience from the consumer’s point of view, we focused additional market research on the total loss customer experience.

We found that roughly half of consumers (46%) were dissatisfied with their overall experience. Length of time to settle the claim ranked lowest in customer satisfaction, followed closely by the number of different people spoken with to resolve the claim.

_{^{Source: LexisNexis® Risk Solutions 2023 Total Loss Consumer Study}}