The Importance of Auto Insurance
So everybody has auto insurance if you have a vehicle, and there’s some developments in the personal lines insurance industry with regard to automotive that you really need to know about. No matter what your scenario is, no matter what state you’re in, no matter what kind of car you have, no matter what kind of coverage you have, there are some things that you should be aware of with your coverages that could affect how you drive your car and how you insure your vehicle. Especially with a few types of vehicles, namely Stellantis, which makes Chrysler, Plymouth, Jeep, Dodge, Ram trucks, and even Fiat. Also, if you have an electric vehicle, there are some things you should know about. But in general, the takeaway is: don’t crash your vehicle.

The Growing Importance of Avoiding Vehicle Crashes
Obviously, you don’t want to crash your vehicle, but it’s way more important not to crash your vehicle right now than it ever has been. You might say, “Well, I have insurance, and even though my rate might go up and I have to pay a deductible, it’s not the end of the world.” Well, it could be the end of the world if you crash your vehicle right now. The process of getting it repaired and getting your insurance claim done could be dramatically different than it has been in the past. Here are a couple of reasons why.

Parts Backlog and Repair Delays
First of all, there is another parts backlog. We have a client we’re speaking with that has very minor damage to an underpan on their vehicle. They were on a gravel road, went over some bumps, and the vehicle dipped down a little bit. There’s a liner underneath the engine and drivetrain that’s a thin piece of metal with some felt on it that was bent. It’s about a $150 part, no big deal, held on with four bolts. Well, the ordering of that part could take four weeks. Fortunately, the car is pretty much drivable as it is—they had to cut off some of the hanging-down part so it wouldn’t catch on anything low—but if it was more dramatic and the car wasn’t drivable, that could be a problem.

Insurance Limits on Rental Cars and Vehicle Totaling
Here’s the other problem: many insurance companies have limits on how much they pay for alternate transportation, meaning a rental car. So if you had to wait for the part for four weeks, but you only have two weeks’ worth of coverage on your rental car, that could be a problem. Or if the rental goes too long, they might total your vehicle. We’re seeing claims on electric vehicles where if somebody damages their battery, and the battery might take nine weeks or three months to come in, the insurance company doesn’t want to pay that much in rental car costs—they just total the car. Now you’re out your car, and it costs you even more money because now you have to upgrade to a newer car.

The Unique Challenges of Electric Vehicles
Speaking of EVs, imagine if that vehicle we were talking about with the underpan was an EV, where that pan is located over the battery. If instead of damaging a $150 thin piece of metal, it impacted and punctured the battery, that could be a $20,000 or $30,000 part. That car is totaled for what should have been a minor repair. The insurance companies are now starting to factor that into their rates.

The Future of Stellantis and Insurance Risks
Now, what about Chrysler, Stellantis, and Jeep? What are we talking about? Well, the Stellantis company owns major nameplates, everything from Jeep, Chrysler, Dodge, Ram trucks, Fiat, and a couple of other European names. They are in the process now of unwinding their company. They’re probably not going to go bankrupt, but they’re looking at selling off bits and pieces to a Chinese company that may close some of these brands and may shut down some of the manufacturers. So if you’re an insurance company and you’re imagining that you’re insuring this Jeep Wrangler, and eight years from now, five years from now, or three years from now, there may not be any Jeep dealers or Jeep parts, or even if there are, they might not be making a lot of spare parts because they’re winding down the company. If we need a fender and there are no fenders to be had, we might have to total that vehicle. They’re looking at the viability of the manufacturer as part of their underwriting process. So certain brands that are at risk of being folded or terminated or merged with something else, especially when parts manufacturing is going to be reduced even more, are now a red flag for insurance companies.

Advice for Vehicle Owners
The takeaway from this is if you own a vehicle, be very, very careful about not crashing it. Obviously, you would anyway, but it’s much more important now. It’s more than just going to a body shop and getting it fixed. Speaking of body shops, we have a couple of other clients who have had minor damage to their vehicle and wanted to go to a body shop to get it fixed. They were told that it’s three weeks just to get an estimate—not to repair it, but just to get an estimate. Their estimator only works three days a week by appointment. You can’t just stroll in and get an estimate, and it’s three weeks out just to get an estimate. So what do you do in the meantime? If your car is undrivable, or even if it is drivable, you can’t start putting in a claim until you have that estimate.

Current Challenges in the Auto Repair Industry
The auto repair and collision repair industry is undergoing a lot of turmoil because of parts, labor, and the backlog of body shops. There are some manufacturers that aren’t going to have parts, so be very careful about driving your vehicle. Don’t crash it. Make sure you’re owning or buying a nameplate that’s going to be a little easier to get parts for—a more mainstream brand that has a lot of vehicles on the road. If you do have some type of damage, look at your source of parts—maybe aftermarket, maybe doing it yourself, maybe hiring a repair shop. One of the things we found is that there are repair shops that can bolt on parts for cheaper than body shops. This turmoil could affect the value of some vehicles too. For example, some electric vehicles may have insurance premiums that are $400 or $500 a month because the insurance companies don’t want to cover them, so they’re charging you $5,000 a year to cover them.