2025 Auto Liability Trends: Lessons Learned and Wheels Turned

Last year, we discussed the worsening influence of nuclear verdicts on the auto liability industry. Unfortunately, the trend persists with little momentum behind tort reform or regulations for third-party litigation funding.

Rich Magold, Commercial Auto Product Manager, and Ariel Jenkins, Assistant Vice President – Risk Control, give us a glimpse of what to expect in 2025, including the industry’s plans to tackle legal system abuse, conditions affecting claims, and how technology is reshaping preventative measures for fleets.

Limiting the Impact of Legal System Abuse

Last week, the American Property Casualty Insurance Association (APCIA) announced its 2025 advocacy priorities, including measures to tackle widespread legal system abuse. The group noted that “the growth of third-party investment and funding of US litigation — particularly in intellectual property litigation — has been alarming and has highlighted the need for transparency and disclosure of who is profiting from judicial outcomes.” For the auto liability industry, measures to limit third-party litigation funding could limit losses and reduce premiums. For now, premiums continue to increase at a rate that still cannot cover losses of massive jury awards.

Evolving Claims Conditions

Due to climate change, there have been increasing claims related to comprehensive policies that cover wind, hail, and storm damage. Record-setting flooding, natural disasters, and unexpected storms in locations not usually impacted are becoming regular occurrences. For those in the insurance industry, this is not a political issue, but a trend that is continuing to worsen and potentially result in more total loss claims.

Rental vehicle shortages have improved compared to last year’s trends. However, finding qualified mechanics for vehicle repairs, increasing repair delays, and repair costs continue to be persistent problems. Auto parts are more complicated, involving enhanced technology that leads to expensive repairs. However, much of this technology is necessary for accident prevention and may resolve as it becomes consistently standard in vehicles with more mechanics trained in those repairs.

Enhanced Risk Control Technology

Communication technologies, sensors, and computer vision are core technologies influencing vehicle safety. While autonomous vehicles are still being trialed in several cities, most have seen success with mostly minor incidents. Computer vision, which allows vehicles to perceive and understand their surroundings, has experienced incredible advances. For autonomous vehicles, this includes enhanced object detection and classification, faster decision-making, higher accuracy lane detection, enhanced pedestrian detection, and adaptability in poor weather conditions. The emergence of Edge AI will boost computer vision tech capabilities to make decisions, which reduces latency, allowing for split-second decisions based on real-time data.

For fleet drivers, advanced driver assistance systems (ADAS) use computer vision, sensors, and communication technologies for lane departure warnings, adaptive cruise control, automatic emergency braking, and traffic sign recognition functions. When used in conjunction with telematics, these technologies are key in not only accident prevention, but in providing feedback to drivers, improving their performance and making long-lasting changes in driving behaviors. Computer vision is also expanding to be utilized for vehicle inspection and maintenance. Technologies like dash cams remain relevant as a key factor in defending fleets against poor third-party drivers and, more recently, auto insurance scams. Much of this technology is offered as a standard for newer fleets, making it more accessible and affordable. For the auto liability industry, these advances are not just about reducing claims but saving lives.