WASHINGTON - The American Property Casualty Insurance Association (APCIA) issued the following statement this week in response to new litigation attempting to capitalize on the ongoing pandemic by targeting the auto insurance marketplace.
“The plaintiffs’ bar is leaving no stone unturned during the pandemic. The latest play is targeting the auto insurance marketplace,” said Stef Zielezienski, APCIA’s executive vice president and chief legal officer. “Litigation profiteering is a direct threat to long-term economic recovery. The insurance industry is working to rebuild communities and yet this type of lawsuit abuse has the opposite effect.”
Some enterprising attorneys are misconstruing facts about highway data and auto insurance in an effort to recruit new business during the pandemic, which will ultimately impact the marketplace, its consumers, and long-term economic recovery. In 2020, auto insurers took immediate voluntary action to provide more than $14 billion in refunds and credits to policyholders for reduced driving during the pandemic. In addition, the industry has deployed more than $220 million in philanthropic contributions during COVID-19 to support local communities.
“Insurers understood the urgency of helping businesses and individuals recover from the unprecedented crisis caused by the COVID-19 pandemic. Insurers are committed to serving policyholders during this difficult time and will continue to adapt claims handling procedures to meet the new virtual needs required to pay claims quickly and efficiently. Policyholders are encouraged to communicate any reduction in their driving habits to their insurer to discuss adjustments in premiums if those changes have not happened automatically.”
The National Highway Traffic Safety Administration reported that traffic fatalities increased significantly in the first nine months of 2020, despite overall vehicle miles traveled decreasing during the COVID-19 pandemic. Now, various sources have indicated that miles driven have been increasing over the last few months and are approaching pre-pandemic levels. According to the Federal Highway Administration, 8.6 percent fewer miles were driven in September 2020, marking the smallest monthly decline since the peak of the pandemic.
“The 2020 increase in road fatalities suggests that despite improved automobile technologies and auto safety laws, driver behavior is deteriorating at a rapid pace. Trends in reckless driving could prove even more fatal as traffic volume starts to return to pre-pandemic levels. These dangerous trends, combined with increasing litigation, medical, and auto repair costs impact the marketplace.”
Additionally, insurers are paying major catastrophe claims in 2020. Current estimates indicate that insured pandemic losses will be more than $100 billion globally. The industry is helping communities rebuild after prolonged social unrest and handling an estimated $2 billion in insured losses, almost twice the previous record suffered in Los Angeles in the 1992 period. In addition, 2020 was a record year for natural catastrophe damage with U.S. insured losses expected to total $67 billion from record-breaking hurricanes and devastating wildfires.