Depending on what report you have read, totaled auto losses are up, down or relatively stable.

Executive Summary

A surge in the use of photo-based AI estimating by auto insurers during the pandemic and after, as well as increases in the number of vehicles declared total losses by insurers, raises the question of whether the two trends are related. Does the accuracy of AI photo damage estimating impact the number of totaled autos? While experts agree the AI tool certainly drives efficiency, the factors driving total loss determinations have more to do with economics and less with technology, they say. And not all data show the number of totaled autos rising either.

Ever since the personal auto segment recorded a combined ratio of 112 last year—a figure not seen since the mid-1970s—the property/casualty line has endured increased scrutiny. In response, auto insurers tightened their risk appetites and raised rates to compensate for costlier parts and longer repair times, the result of tech-laden vehicles.

With the goal of reducing loss costs and expenses, one area of focus within the claims process is total loss frequency, a figure that represents vehicles considered unrepairable. Because artificial intelligence-backed tools are increasingly being used by insurers, particularly photo-based AI applications to estimate damage to autos that result from accidents, it’s natural to wonder whether the use of AI tools is contributing to an increase in the number of totaled vehicles.

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