This year to date, Wisconsin-based Acuity Insurance has reported an increase in severity of more than 40% for its commercial auto insurance liability claims.
Accidents are becoming more expensive due to the increased cost of repairing and replacing vehicles and the impact of social inflation, Acuity said. The spike in claims severity comes as people return to the road after a significant drop in travel during the early years of the COVID-19 pandemic.
“The data we’re seeing reflects challenges facing not only insurance carriers, but also business owners, who could face large expenses in the event of an accident,” said Paige Nelson, director of commercial lines and product development at Acuity. “Taking caution on the road and ensuring your business has the proper coverage are two of the easiest steps a business owner can take to protect their livelihood.”
According to the National Highway Traffic Safety Administration, the number of miles traveled in 2021 increased by around 325 billion, and road fatalities rose 10.5% from 2020, the largest annual increase since 2005.
With the increase in accident severity and claims costs, it’s important for businesses to have the right coverage for their vehicles, as well as the right coverage limits, Acuity said. The insurer listed five reasons that businesses should have commercial auto insurance:
