Winter Weather has Negative Effect on Auto Insurance Companies

By: Mike Silverstone, Car Insurance Analyst
CheaperCarInsurance.com

Auto insurance companies are paying out more claims for damages from the frequent winter weather we have had recently. The increase in frequency of the winter weather this season has caused more traffic accidents due to:

• Slick road conditions
• Lower visibility
• Unexpected weather conditions

For auto insurance companies, winter weather typically means more phone calls. However, these are not the types of calls they look forward to. Auto insurance companies nationwide have encountered an increase in claims from fender benders by 20% compared to last year. The adverse weather conditions this year has taken auto insurance companies by surprise in the increase of claims being made.

Why the Increase in Claims with Auto Insurance Companies?

Parts of the country that rarely see snow have experienced more snow days this winter season, leaving unprepared motorists at risk. Approximately 800,000 drivers have been in auto accidents this year as a result of not taking necessary safety measures for driving in such inclement weather.

While business is up for auto repair shops, this is bad news for auto insurance companies. One company reported that the majority of claims being made this year are from drivers that have slid off the road or got stuck in a ditch from icy roads. The increase in inclement weather is taking a toll on insurance companies as well as drivers.

For auto insurance companies, January in particular is typically a bad time of the year. This year, the amount of insurance claims being filed has soared as a result from the frequent winter weather affecting the nation. The weather has taken local communities by surprise and has caused them to struggle to have roads treated in their areas.

Furthermore, the rise in inclement weather has affected the road conditions, making them unfavorable for driving on. But it’s not just ice making the roads bumpy. Many states, such as Virginia, have reported potholes as an escalating problem from the adverse weather. Drivers are paying for the costly repair from these potholes due to the damage created after hitting them. Potholes create a number of problems and an increase in claims for auto insurance companies from any of the following:

• Loss of control of the vehicle
• Smashed mufflers
• Fractured undercarriages
• Further damage to tires, wheels, and shocks

As a result from the increased number of claims, some auto insurance companies have had to raise insurance rates.

This Winter Has Had Some Advantages for Some Businesses

Among auto repair body shops, auto insurance agents have been taking advantage of the winter weather. The increased number of accidents provides agents more business as they service their clients in filing claims with auto insurance companies.

Auto body repair shops are thriving from the frequent accidents caused from the inclement weather. In Texas, one body shop states they have seen an increase by 50% in business on icy days.

There are, however, a few parts of the country where auto insurance companies have reported a drop in the amount of claims being made. Areas such as Knoxville, TN reported they have seen a drop by 20% in collisions. This is most likely a result from more drivers staying home to avoid the hazardous road conditions.

Take the Roads More Seriously

If inclement weather has hindered driving conditions for you, stay home if at all possible and avoid getting on the road. Driving in poor weather conditions increases your risk of getting in an accident and having to file a claim with your auto insurance company. Check the weather forecast before getting on the road. If you must drive in inclement weather, be sure to drive carefully and take necessary precaution.

Posted: March 01, 2010