CCC report shows auto insurance market steadies in 2025, challenges persist

The auto physical damage (APD) market saw signs of stabilization in 2025 but not without challenges that are becoming permanent fixtures, CCC’s Q4 Crash Course report says. 

“After several turbulent years marked by inflation spikes, supply chain disruption, and record vehicle complexity, the industry entered 2025 on firmer footing,” the report says. 

For example, personal auto net combined operating ratio (NCOR) improved from 112.2% in 2022 to 104.9% in 2023 and 95.3% in 2024 and 2025, the report says. It adds this reflects strengthened underwriting performance. 

“Even broader economic indicators trended in the right direction: Motor Vehicle Insurance CPI growth cooled dramatically, falling from 16.3% in late 2024 to 3.1% in 2025, easing some of the affordability concerns that have dominated insurer and policyholder conversations for the past several years,” the report says. 

Rising total loss frequency has become a cost driver reshaping APD, the report says. The frequency grew from 22.1% to 22.8% in 2025 and was driven by increased age of vehicles, a decline in lower severity claims filings and the accumulation of advanced electronics. 

More than 72% of total loss valuations are on vehicles seven years or older, it says. 

The share of claims flagged total loss was a record in 2024, based on CCC historical trends. Results from 2025 are poised to be above that record by about one percentage point, the report says. 

Increased total losses and improved backlogs has reflected in improved cycle times, the report says. Overall repair days remain down more than 2 days in total from their peak. Yet, remain up by multiple days relative to 2020. Factors such as increased supplement handling, vehicle complexity and technician shortages could be contributing to the elongated repair times, it says. 

Adjusted vehicle valuation also increased to $13,700 through October but remains lower than the peaks in mid-2022. 

Inflation is cooling but repair costs continued their steady climb, the report says, with the total cost of repair growing from $4,700 to $4,768 through Q3. 

Average labor remains down year-over-year. Initial results through Q3 show a decrease of 0.7 hours per repair. Yet, labor rates continue to increase year-over-year and saw a 3% increase through September, the report says. 

Repairers are also having to adjust workflows, invest in new tools and training and coordinate more tightly with insurers as the electronic and software components of repairs expand. This year saw diagnostics and calibrations embedded into the moder repair process, with 88% of DRP estimates including a scan and calibrations increasing by more than 35%. 

Paid Claim frequency for collision and comprehensive first party coverages continue to trend down slowly, the report says. 

“Underlying drivers of frequency – paid count and exposure units – both continue to decline despite the overall growth within the car parc, which exceeded 295 million vehicles in Q2 this year,” according to the report. 

It adds that liability property damage paid frequency remains relatively stable, but affordability challenges could drive the share of uninsured motorists higher. 

Miles driven in 2025 are 1% higher versus last year and 1.5% higher than pre-covid 2019.

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