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The Consequences of Spiking Oil

In the world of auto physical damage claims, we need to focus our attention on some less obvious areas that will be influenced by spiking oil prices.

By Greg Horn | Updated on July 29, 2011

When the price of oil spikes as it has in recent months (and potentially more after Tropical Storm Don), many start to look at the correlation between these costs and vehicle miles traveled (VMT), and the effect on claims frequency. With the world oil demand expected to continue growing while the supply from countries that are not OPEC members likely slowing, the oil market will tighten further through 2012.

In auto physical damage claims, we need to look beyond this direct impact and focus our attention on some less obvious areas that will be influenced.

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