Will Fewer Drivers On The Road Mean Lower Auto Losses? It Depends

 Tuesday, April 21, 2020

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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?

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.
AutoLiability
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