Diving Into Collision Repair Costs, Claims Data

A new report issued today by Mitchell International Inc. takes a long look at facts and figures surrounding the claims and collision repair industries. And the good news for insurers is that the numbers seem to be trending in the right directions.

Mitchell, a provider of information, workflow and performance management solutions to the property/casualty claims and collision repair industries, today released its Q1 2011 Industry Trends Report. "Paint by Numbers: A Deep Dive Into Refinish Data" explores whether all vehicles are treated equally in the refinish process by comprehensively examining refinish data for one year of appraisals, comparing vehicle age, type and origin.

Greg Horn, Mitchell's VP of Industry Relations and author of the report, surmises that every damaged vehicle is unique, and the proper repair procedure must be done on an individual basis.

"Contrary to what you might think, recent Mitchell data shows that older vehicles—surprisingly including larger trucks and SUVs—may receive lower hourly additional paint operations compared to newer cars, newer being one year old or less in this case," Horn says. "In contrast, these new vehicles—again those one year old and less—may require more blend time than a two-year-old vehicle."

Horn believes that there is a good reason behind these differences in paint refinish estimate hours, since larger vehicles, such as SUVs and trucks feature ample panels with enough area to allow shops to effectively blend the base color within the damaged panels.

The study also took country of origin vehicle mix into account to determine paint refinish hours.

"In estimates where blending was specified," Horn says, "we found that when we compared blend times by vehicle country of origin, age and type, we saw higher blend hours for European and Asian nameplates compared to U.S. manufactured vehicles—including estimates where masking for overspray was specified."

Therefore, Horn says that while the data seems to indicate that older vehicles (including trucks/SUVs) receive lower hourly additional paint operations, it is logical to assume that the country of origin vehicle mix is an important factor as well.

Collision Repair Data

Mitchell's Industry Trends Report also examined collision repair data over the past year. The company's Q4-2010 data reflects an average gross initial Collision appraisal value of $2,864, which is $137 less than the same time period last year. Applying the indicated development factor, Mitchell says, suggests a final Q4 2010 average gross collision appraisal value of $2,935, which is a $66 less than the same quarter in 2009. At $13,567, the average actual cash value of vehicles appraised for collision losses during Q4-2010 reflects strong recovery in used car values.

Additionally, in, Mitchell found that the initial comprehensive average severity in Q4 2010 was $2,536—$22 less than the same quarter in 2009. Applying the prescribed development factor for this data sets an anticipated final value of $2,591, which Mitchell says is $33 higher than Q4 2009.

To read the full Industry Trends Report, click here.

 

 

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