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Supply chain disruptions are affecting car insurance claims

Global supply chains have been under pressure since early 2020 due to the COVID-19 pandemic. While many manufacturers have bounced back, the automotive industry continues to suffer from the effects. As a result, many new vehicles and specific car parts aren’t as readily available as they used to be, which can present issues for drivers and insurers alike when it’s time to make a car insurance claim.

Why is the manufacturing of new cars and car parts so delayed?

While the onset of the pandemic led to temporary automotive plant closures in early 2020, other factors continue to contribute to ongoing supply chain issues in the auto industry today. One of those factors is a global shortage of semiconductor chips.

A semiconductor chip plays an important role in many modern vehicles. Pandemic-related auto plant closures and an increase in demand for electronics that contain semiconductor chips, among other issues, have contributed to shortages of this essential item. As a result, vehicle manufacturers are unable to release new vehicles to dealerships quickly enough to keep up with demand.

But it’s not just car dealerships that are having issued. The auto parts and repair industries are facing challenges, too. The price of steel and other materials has spiked during the pandemic, delays in transportation has led to a shortage of parts, and many workplaces are still dealing with workforce shortages. As a result of these challenges, vehicle parts aren’t coming in as quickly as they used to, they’re much more expensive, and auto shops may not always have the manpower they need to complete prompt repairs.

How could supply chain issues affect me when making a car insurance claim?

If you have to make a car insurance claim, you could feel the effects of these supply chain disruptions in a variety of ways:

If your insurer determines your car is a write-off, finding a replacement vehicle might be a challenge, as there aren’t as many new cars available to drive off the lot. Many dealers have to place orders to have new vehicles shipped in and the wait times can be substantial, depending on the make and model.

If you’re being reimbursed for the actual cash value of your current vehicle and you’re looking to upgrade to a brand new vehicle of a similar make and model, you may experience sticker shock when shopping for a new car. Due to a lack of availability and an increase in cost for materials like steel, the price of new cars has increased significantly over the past two years.

If your car simply needs to be repaired, you might discover that it will be at the repair shop for a while – instead of a week, your car could be out of commission for a month or more, depending on when the required parts come in.

If you are covered for transportation replacement under your car insurance policy, you’ll be covered for the cost of a rental while you’re stuck without your vehicle. However, most car insurance policies have a limit on how many days you can keep a rental. Reach out to your broker to find out how many days of rental car coverage are included in your policy and what will happen if you’re stuck without your vehicle for longer than your coverage allows.

If you’ve recently been involved in a collision and have questions about the claims process or how you might be affected by supply chain issues, reach out to one of the brokers or CSRs at DPM Insurance Group. Click here to find the DPM Insurance office closest to you: https://dpmins.com/locations/

 

Source: Economical Insurance

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