The Expert Podcast

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's some information you should know about. But in general, the takeaway is: don’t crash your vehicle. Okay, obviously, you don’t want to crash your vehicle, but it's more important not to crash it now than it ever has been. You might say, "Well, I have insurance, and even though my rate might go up, 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, and here are a couple of reasons why. 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, which was bent. It's about a $150 part, no big deal, and it holds on with four bolts.

Well, ordering that part could take four weeks. Fortunately, the car is pretty much drivable as is; they had to cut off some of the hanging part so it wouldn't catch on anything low. But if it were more dramatic and not drivable, that would be a problem—four weeks for a small part. Here's another issue: many insurance companies have limits on how much they pay for alternate transportation, meaning a rental car. So, if you have to wait four weeks for a part, but your coverage only pays for two weeks of rental, that’s a problem. Or, if the rental takes too long, they might total your vehicle.

We’re seeing claims on electric vehicles where if someone damages their battery and it takes nine weeks or three months for the battery to come in, the insurance company may not want to pay for the rental car that long and just total the car. Now you're out of your car, and you have to upgrade to a newer model, which costs you more.

Now, imagine if the vehicle with the underpan damage was an EV, where the battery sits. If instead of damaging a $150 thin piece of metal, the damage impacted and punctured the battery, that could be a $20,000 to $30,000 part. That minor repair could total your car. Insurance companies are starting to factor in such risks for electric vehicles, and what used to be a minor repair could now mean a total loss.

Now, let’s talk about Stellantis, Jeep, Chrysler, and what’s going on. Stellantis owns major brands like Jeep, Chrysler, Dodge, Ram trucks, Fiat, and some other European names. They are in the process of unwinding their company—not necessarily going bankrupt, but they may sell parts of the company to a Chinese firm, which could close some of these brands or manufacturers.

If you're an insurance company, insuring a Jeep Wrangler, for example, five or eight years from now, there might not be Jeep dealers or Jeep parts. Even if the parts exist, the company might not be making spare parts due to the company's downsizing. So, if you need a fender, and there’s none available, the insurance company might have to total that vehicle. They're factoring in the manufacturer’s viability when determining rates for brands at risk of folding or merging, especially those with reduced parts availability.

The takeaway is: if you own a vehicle, be extra careful not to crash it. While that's always important, it’s even more critical now. It's not just about going to a body shop and getting a fix. Speaking of body shops, we have clients who have had minor damage and tried to get estimates, only to be told it's a three-week wait—just to get an estimate. That’s because the estimator only works three days a week by appointment. You can't just walk in.

In the meantime, if your car is undrivable or even if it is drivable, you can’t start your claim until you have that estimate. The auto repair and collision industry is facing parts shortages, labor issues, and backlogs. Some manufacturers may not even have parts available.

Be careful about what kind of vehicle you own or buy. It’s better to go for a mainstream brand with lots of parts available. If you have damage, consider alternatives like aftermarket parts, doing it yourself, or hiring cheaper repair shops. Some repair shops can bolt on parts for cheaper than a body shop. The turmoil in the industry could also affect the value of your vehicle. For example, some electric vehicles have insurance premiums as high as $400 to $500 a month because insurance companies don’t want to cover them, charging you $5,000 a year.

Let us know what you think in the comments. Tell us about your insurance rates and how much they've changed over the last year. Thank you for watching another video at ActualHuman.com and Describe.TV. If you have questions or comments, feel free to leave them below. Remember, you can access live one-on-one consultations with licensed experts in insurance, civil court mediation, real estate records, and more. You can't ask YouTube questions, but you can talk to a live expert using the link below. Thanks for watching!