What’s behind the increased cost of auto insurance claims?

With the average cost of auto insurance claims on the rise, many drivers are wondering what’s behind the increase and if there’s any relief in sight. Here’s a breakdown of two key factors that are behind the rising cost of auto insurance claims in recent years.

Advanced technology is more expensive to repair
Advanced auto technology, once reserved for top-of-the-line luxury vehicles, has become increasingly more common. Now, high-tech features such as blind spot detection warnings, rear-view cameras, lane keeping assist and autobraking systems are widely available. While many of these modern features can be helpful to drivers while on the road, they are typically more complicated and expensive to repair in the event of a collision. What may have once been a cheap fix following a parking lot fender-bender could now result in a total write-off.

For example, the average cost of a basic windshield replacement typically runs between $400 - $800, but a windshield with advanced safety features could range closer to $2,200.¹

Headlights are another example of the extreme shift in repair costs over the years, though they remain one of the most common parts damaged in a collision. Replacing a broken headlight 15 years ago would have only cost a few dollars, however now a headlight that is equipped with sophisticated self-dimming technology could set you back almost $1,500.²

Bumpers are another common culprit of increased repair costs. In 2010, the bumper of a common SUV required only 19 parts. In 2017, the bumper for the same vehicle required 49 parts.³Bumpers now typically include a suite of telematics, radar and other camera-based sensors that have caused repair prices to soar.

Extended repair times
Hand in hand with the expansion of advanced auto technology comes an increase in the time required to fix a modern vehicle. In addition to the repair or replacement of parts, the technician working on the vehicle may need to preform additional procedures related to the car’s safety system, such as diagnostics, calibration, aiming and relearning. These procedures are necessary to ensure the car is safe to drive but are often time-consuming to complete. They also require new methods, tools, training and technology that can further drive up the price of the labour required to perform them.

With the average cost of auto insurance claims on the rise, it’s important to know that you have the coverage you need in the unfortunate event of an accident. If you have questions about your current OTIP auto coverage, call your OTIP broker 1-888-494-0090. If you’d like to get a quote for car insurance, speak with an OTIP broker today at 1-888-892-4935.

Need to submit a claim? With OTIP’s new OTIP Home and Auto mobile app, you can instantly submit your claim information right on your desktop, tablet or mobile device. You can also access your policy information, review your insurance documents, submit coverage change requests, contact OTIP and more. Our mobile app can be downloaded on iPhone, Android and BlackBerry devices by searching “OTIP - Home and Auto” in your app store or you can visit our website.