Doom, Gloom & Car Insurance

The quarterly CCC Intelligent Solutions quarterly Crash Course report rarely brings good news. Insurance claims are almost always on the rise, cost more, take longer, and erode profitability. The latest quarterly report, though, paints an especially dark picture regarding building, buying, owning, financing, insuring, driving, and repairing cars. It's enough to make you want to turn in your keys.

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I am reading the CCC Q3 Crash Course report while Insuretech (ITC) is underway this week in Las Vegas. At least one company has brought new thinking and a new solution to meet the evolving auto insurance challenge - Insurevision. Insurevision will be bringing its AI transformer-based concept to the ITC stage tomorrow.

One paragraph at the beginning of the CCC report sums up the horror spreading across the broader U.S. economic landscape:

"Household finances show clear signs of stress. Total household debt hit a staggering $18.2T in the first quarter of 2025, with auto loans accounting for $1.66T of the total. Loan delinquencies are also rising sharply; nearly 8% of all auto loans are 30+ days delinquent, the highest level recorded since 1994. Consequently, vehicle repossessions jumped by 43% from 2022, reaching 1.73M in 2024."

The report further notes that the implementation of tariffs on aluminum, steel, imported vehicles, and vehicles with less than 85% U.S. content is driving up the average retail prices of new and used cars as well as vehicle repairs. Rising insurance costs are driving consumers to adopt higher deductibles, drop coverage, or to avoid filing claims. Repair costs are also being driven upward by tariffs and the now perennial challenge of repairing vehicles with sophisticated safety systems that require testing and calibration.

While tariffs are intended to drive on-shoring of vehicle production and parts sourcing, the impact of EV tax credit rollbacks and the unfolding abandoning of multi-billion dollar EV investments has left auto makers bereft of the financial resources necessary to fund the domestication of production, says the report. In essence, both consumers and car makers are in a financial bind and car insurers are caught in the middle of the muddle.

This would seem to be an ideal time for innovation in the auto insurance sector. Insurers and their clients are not only caught in a financial vortex but they are also entangled in the crucible of driver monitoring and driving automation. Regulators are taking steps to force drivers to be more attentive to their driving even as safety systems are emerging and evolving to take over the task.

For well over a decade, the primary source of insurance industry innovation was so-called usage-based insurance or insurance telematics. The objective here was to surveil and evaluate driver behavior in the interest of rewarding "good" drivers with insurance discounts.

The well-intentioned effort somehow went awry as Progressive came to define this value proposition narrowly around scoring drivers based on harsh braking and acceleration, the amount of driving, and time of day. Progressive was sufficiently successful with this approach that insurers around the world adopted the same limited parameters.

The only enhancement to insurance telematics was the addition of video capture in the form of dashcams. But dashcams added little more than video surveillance to the tracking surveillance. Dubbed "video telematics," dashcam solutions added little in the way of refinement of driver scoring - though they did provide video evidence of driver distraction and crash forensics.

As a still-recovering former participant in a usage-based insurance program I can honestly report that these programs tend to lack transparency and seem to be designed to defeat or undermine any effort by the user to properly understand where their driving needs improvement. As I wrote on this topic more than 10 years ago: "The only thing worse than your car insurance company ripping you off, is your car insurance company telling you how to drive. But what if your car insurance company is ripping you off AND telling you how to drive?"

Ultimately, this was my conclusion. I discovered at the time of my experiment and since that the lowest available insurance rates are non-monitored, non-telematics-based policies. Even the most ardent advocates of usage-based insurance estimate that insurance telematics (UBI) accounts for no more than 10% of policies, regardless of the market.

Now, nearly 20 years since Progressive introduced its Snapshot UBI offering in the U.S., the auto insurance industry is still looking for new ideas to meet the industry demand for proper, accurate, and transparent driver scoring - and to do so, now, in a world increasingly obsessed with privacy. Insurevision delivers an AI-infused contextual driving analysis proposition to the insurance industry.

Rather than a Progressive-like focus on a handful of potentially misleading metrics for developing driver scores, Insurevision takes a contextual approach that is even capable of calculating driver risk in real time - though that is not the primary objective. Insurevision takes all observable factors into account in its scoring, which means the Insurevision solution may lend itself to supporting driver coaching - probably most suitable to the commercial fleet sector though not irrelevant to consumers.

After two decades of Progressive hegemony in the usage-based insurance sector without a shred of innovative progress, it's reassuring to see innovation return to the industry. Insurevision is in position to fundamentally reshape the insurance conversation - which might help dispel the looming gloom and doom.