The enfeebled economy did not exacerbate claims severity for auto insurers a new study finds. The 2010 edition of its Industry Trends Report by San Diego-based Mitchell International Inc. countered the notion that bad economic times presage rising claims severity.

Greg Horn, Mitchell's VP of industry relations, credits the counterintuitive findings partially to the fact that the recession has forced an aging of the vehicle fleet. With the average age of a typical vehicle now at an unprecedented high of nearly 10 years, drivers are more likely to under-insure or forego insurance altogether. The drivers of these vehicles are much less likely to file a claim in the event of a collision, Horn notes.

"Tough economic times will likely continue to spur the decrease in total losses that are paid for by collision coverage because the pool of older vehicles that has been so sharply reduced will continue to contract further,” Horn says. “In addition to the underinsured phenomenon, there are substantially fewer older cars and trucks available to purchase: The federal Cash for Clunkers program alone took approximately 690,000 older vehicles off the roads, fewer trade-ins are occurring in a time of depressed new car sales, and the lease financing collapse has made fewer cars available from this traditional source of used fleet vehicles."

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