{"id":2595,"date":"2026-04-14T13:44:21","date_gmt":"2026-04-14T13:44:21","guid":{"rendered":"http:\/\/americanfoodsupplies.com\/index.php\/2026\/04\/14\/oil-prices-might-reduceaccidents-but-severity-would-offset-impact\/"},"modified":"2026-04-14T13:44:21","modified_gmt":"2026-04-14T13:44:21","slug":"oil-prices-might-reduceaccidents-but-severity-would-offset-impact","status":"publish","type":"post","link":"http:\/\/americanfoodsupplies.com\/index.php\/2026\/04\/14\/oil-prices-might-reduceaccidents-but-severity-would-offset-impact\/","title":{"rendered":"Oil Prices Might ReduceAccidents, But Severity Would Offset Impact"},"content":{"rendered":"
\"\"<\/a><\/figure>\n<\/p>\n

By Jeff Dunsavage, Head of Research Publications and Insights, Triple-I<\/em><\/strong><\/p>\n

If oil prices continue to rise due to hostilities in the Middle East, fewer drivers on the road could lead to fewer accidents and insurance claims. However, increased severity \u2013 driven by rising replacement costs \u2013 would likely overwhelm any decrease in frequency over time, according to Patrick Schmid, Triple-I\u2019s chief insurance officer.<\/p>\n

\u201cEven before the war, repair costs were rising more than twice as fast as general inflation,\u201d Schmid said.  \u201cFrom the supply-chain disruptions of COVID through the past year\u2019s economic policy uncertainty with tariffs, as well as legal system abuse, upward pressure on claim costs has been unrelenting.\u201d<\/p>\n

Indeed, more costly gas might not affect driving as much as one might expect. According to the American Public Transportation Association, a 10 percent rise only reduces driving by 0.2 to 0.3 percent. Even if high prices continue, the average drop is just 1.1 to 1.5 percent.<\/p>\n

\u201cPeople still need to get to work and run their lives,\u201d Schmid said. \u201cGas price alone isn’t enough to dramatically change that.\u201d<\/p>\n

Research shows wealthier drivers cut back on driving more than lower-income drivers \u2013 who tend to have fewer choices as to how they get to and from work \u2013 when gas gets expensive. Policyholders who can\u2019t easily reduce their driving are often the ones with tighter budgets and older, less safe vehicles.<\/p>\n

Oil prices don’t just affect how much people drive \u2014 they also flow through the entire repair supply chain. The cost of auto maintenance and repair climbed roughly 10 percent from 2023 to 2024 alone, a trend pushed higher by inflation and a shortage of skilled technicians.<\/p>\n

What does this mean for policyholders?<\/p>\n

The factors that influence premiums vary widely by state, and accident frequency is just one of them.  Louisiana<\/a> \u2013 one of the least-affordable states \u2013 has recently seen declines in premiums as a result of both reduced frequency and severity.  <\/p>\n

A major contributor to high premiums is the prevalence of fraud and legal system abuse in those states. States like Florida<\/a> that have proactively sought to address these factors through legal system reforms, have begun to see rate declines. Since Florida\u2019s reforms, nearly 20 new property insurers have entered the state and existing carriers have expanded their market share, driving renewed competition in the private market. This facilitated the lowest number of policies administered by Citizens Property Insurance Corp. \u2013 the state-run insurer of last resort \u2013 in over a decade.<\/p>\n

\u201cIt\u2019s encouraging to see other states beginning to follow Florida\u2019s lead,\u201d Schmid said. \u201cIt\u2019s important for policymakers to follow successful examples.\u201d<\/p>\n

Learn More:<\/em><\/strong><\/p>\n

Lessons for Texas from Florida\u2019s Legal System Reforms<\/a><\/p>\n

Florida Premiums Drop Amid Post-Reform Stability<\/a><\/p>\n

Uber Joins Effort to Drive Legal System Reform<\/a><\/p>\n

Auto Premium Growth Slows as Policyholders Shop Around, Study Says<\/a><\/p>\n

Even With Recent Rises, Auto Insurance Is More Affordable Than During Most of Century to Date<\/a><\/p>\n

New York Among Least Affordable States for Auto Insurance<\/a><\/p>\n

Louisiana Auto Insurance Rates Benefit from Declines in Frequency, Severity<\/a><\/p>\n

Revealing Hidden Cost to Consumers of Auto Litigation Inflation<\/a><\/p>\n

Uber Joins Effort to Drive Legal System Reform<\/a><\/p>\n

Legal System Abuse, Artificial Intelligence Cloud 2026 Outlook<\/a><\/p>\n

Triple-I Legal System Abuse Awareness Campaign Enters California, Illinois<\/a><\/p>\n

Georgia Targets Legal System Abuse<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Jeff Dunsavage, Head of Research Publications and Insights, Triple-I If oil prices continue to rise due to hostilities in the Middle East, fewer drivers on the road could lead to fewer accidents an<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-2595","post","type-post","status-publish","format-standard","hentry","category-auto-insurance"],"_links":{"self":[{"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/posts\/2595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/comments?post=2595"}],"version-history":[{"count":0,"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/posts\/2595\/revisions"}],"wp:attachment":[{"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/media?parent=2595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/categories?post=2595"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/americanfoodsupplies.com\/index.php\/wp-json\/wp\/v2\/tags?post=2595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}