Earlier this year the buzz within the auto claims industry was the question of how gas prices would affect claim volume. As anticipated an educated guess would be that with fewer miles driven, fewer claims would follow. With the surge in gas prices in the 2nd quarter of 2008 and a study released a few days ago showing nearly 10 billion fewer miles driven compared to last May, the first signs of a decrease in vehicle accidents is appearing. As national insurers release their quarterly results,  further trends may evolve. Allstate just reported in the 2nd quarter that claims involving autos decreased by 4.2% and bodily injury claims fell 7.6%.  The general consensus among claims professionals we have spoken with throughout the U.S. seems to be that volume has dropped at a yet unknown rate. One interesting factor though in the Allstate report was that while claims were trending downward, auto property damage (APD) settlement averages were up 2.6% and BI payments rose 7.1%. Some of the increase in APD severity may be due to rising parts prices of metal and plastics.

As the 3rd quarter is unfolding, oil prices have dropped due to decreased demand and some states have seen a slight relief in gas prices over the past few weeks. With Labor Day on the horizon and if gas prices continue to slide, drivers may take to roads again. Could this alter trends seen from the first half of 2008?