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Will fewer drivers on the road mean lower auto losses? It depends

Staying at home and closing nonessential businesses during the COVID-19 crisis has resulted in one major benefit for people who still need to drive their vehicles: fewer cars on the road. But the question is: Will the decrease in vehicle use ultimately result in lower auto losses for insurers?

Impacts on frequency? An increase in severity?

The question comes down to two ways we measure losses: frequency and severity. Fewer cars on the road will likely mean fewer accidents and claims, leading to a decrease in frequency. But fewer cars may also have some offsetting severity-related effects.

  • More speeding: The number of speeding incidents has increased significantly in several states, and in some cases, led to fatal accidents. In Southern California, state police have noted recent fatal accidents on the freeways and an increase in accidents that require an ambulance, according to an article in the Los Angeles Times.1 In New York City last month, police issued only 8 percent fewer speeding tickets, despite a major drop in traffic due to COVID-19, according to Streetsblog NYC.2
  • An increase in delivery drivers: The growth of the stay-at-home economy has led many businesses to ask their employees to use their own cars to deliver food and other supplies to customers.3 Many of these drivers are likely not as familiar with the roads as regular delivery drivers and therefore may constantly need to look at directions while driving. Some states are pressing personal auto insurers to cover these delivery drivers during the crisis.4 Will this sudden growth of delivery drivers increase auto losses? 
  • Fewer limits on truck driving hours: To ensure the delivery of essential products, the federal government has suspended rules that limit the daily hours of service for truck drivers. While truck drivers are still required to rest 10 hours after completing their deliveries of essential products, drivers are not required to record hours and could potentially end up tired and prone to accidents, situations that the limits are intended to prevent.5
  • Parts are becoming scarce: When vehicles are in accidents, there are now also significant concerns about the availability of parts to repair them. China, a major supplier of auto parts, experienced a major drop in production because of COVID-19 closures. In addition, many auto factories and parts suppliers in the United States have closed to prevent the spread of the disease6, or have repurposed their manufacturing operations to help supply hospitals and medical professionals with life-saving machines and personal protection equipment. All of this may lead to more drawn-out and expensive claims.
  • Repairs and rentals may take more time: Some repair shops may be closed due to COVID-19 or may take longer to complete repairs with mechanics out sick or staying home. These longer repairs could extend the time policyholders need for car rentals. Both of these factors may increase the cost of claims.

What the data says

Since the start of the stay-at-home economy in the beginning of March, cell phone GPS data has indicated a significant reduction in the movement of people across the United States, according to The Washington Post.7

Verisk has also seen a considerable reduction in the number of auto claims submitted to Verisk across all auto coverages, when comparing March to prior months in 2020. The decrease in claims submissions is a strong indicator of a decrease in frequency.  

One set of data that might provide insight is the data from the Great Recession, when the economic downturn led to reductions in the frequency of bodily injury claims, likely due in large part to reduced mileage. This was more pronounced on the commercial side, as Verisk data shows that frequency dropped over 10% from 2007 to 2009.8

However, it’s important to note that the current situation is not completely analogous to the Great Recession, especially considering some of the factors that might increase severity and counteract the reduction in frequency, as well as other changes to auto experience since the Great Recession, such as vehicle safety technologies.

Reducing rates

Since the crisis began, many states have been encouraging auto insurers to reduce their rates.9 Some insurers have already announced that they will provide refunds on personal auto premiums, as they see declines in claims. Others may be receiving requests, or may already be processing, partial refunds for drivers who share their driving data through usage-based insurance.

Some insureds may seek to reclassify themselves to lower rates. For example, “drive to work” use may now be considered “pleasure” use for some policyholders. Likewise, the estimated annual mileage used in many rating plans may be adjusted down for some and lead to a reduced rate.

At Verisk, we’re actively researching the effects of COVID-19, using multiple data sources:

  • Driving behavior: With data from millions of connected cars in the Verisk Data Exchange, we’re analyzing the effects of the crisis on driving patterns, including the reduction of miles driven, the number of trips taken by state, and the time of day that trips are occurring.
  • Statistical data: We’re also analyzing statistical data reported to ISO. While most data has not yet been reported, our actuaries are looking carefully at the data we have and working to provide an analysis.
  • Claims Data: Verisk has access to numerous sources of insurance claims data that we are analyzing to identify patterns and trends in automobile claims resulting from the COVID-19 situation.

We expect to have an analysis of the impact of COVID-19 on auto rates in the coming months. If you’re interested in learning more, please feel free to contact us at or

  1. Anh Do et al., “With less freeway traffic due to coronavirus, there’s more speeding and that worries CHP”, Los Angeles Times, March 19, 2020, <>, accessed on April 10, 2020.  
  2. Gersh Kuntzman, “Statistics Show Speeding is Out of Control During Corona Crisis”, Streetsblog NYC, March 24, 2020, <>, accessed on April 10, 2020.
  3. Pete Wells, “To Stay Afloat, the Restaurant Business Clings to ‘Contactless Delivery’” New York Times, March 19, 2020, <>, accessed on April 10, 2020.
  4. See, e.g., John Godfread, “Expansion of personal lines automobile policies for delivery services”, North Dakota Insurance Department, March 25, 2020, <>, accessed on April 10, 2020.
  5. Federal Motor Carrier Safety Administration, “Frequently Asked Questions Related to the FMCSA Emergency Declaration”, March 20, 2020, <>, accessed on April 10, 2020.
  6. Sean Szymkowski, "COVID-19 and plant closures: The automotive industry's response to the pandemic,&quot; Roadshow by CNET, April 13, 2020, < >, accessed on April 13, 2020.
  7. Geoffrey A. Fowler, “Smartphone data reveal which Americans are social distancing (and not)”,  The Washington Post, March 24, 2020, <>, accessed on April 10, 2020.
  8. Verisk research.
  9. See, e.g. Alfred W. Redmer, Jr., “Property & Casualty Temporary Rate Relief Filings”, Maryland Insurance Administration, March 23, 2020, <>, accessed on March 31, 2020.

Jared Smollik

Jared Smollik is vice president, personal lines core products at Verisk. He can be reached at

Jim Davidson

Jim Davidson is senior director of commercial lines actuarial products at ISO.

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