Copart recent earnings call what did they say about insurances

During Copart's recent Q3 2026 earnings call, management outlined a dynamic where near-term softness in insurance claims volume is being offset by record-high selling prices and favorable long-term structural trends.

Here is the breakdown of what they shared regarding the insurance side of the business:

Volume Declines Driven by Consumer Pullback

Copart reported a dip in insurance unit volumes, primarily due to consumers changing their behavior in response to rising insurance premiums.

• The Numbers: Global insurance unit sales declined 2.7% year-over-year (or 1.9% excluding the impact of prior-year catastrophic volumes). U.S. insurance units saw a slightly larger drop of 4.2%.
• Consumer Behavior Shift: CEO Jeff Liaw noted that consumers are either paring back their collision coverage, raising their deductibles, or eating the cost of minor repairs to avoid premium hikes. He cited industry data indicating that roughly 25% of vehicle repairs are now self-pay.

Record Pricing and Total Loss Frequency

Despite the drop in volume, the underlying economics of the vehicles they did sell were exceptionally strong. Management emphasized that their long-term growth algorithm remains completely intact.

• Record High ASPs: U.S. insurance Average Selling Prices (ASPs) increased 4.1% year-over-year, hitting a seasonally adjusted all-time record high for a third quarter.
• Rising Total Loss Frequency: This remains Copart’s core tailwind. Total loss frequency hit 23.6% in the first quarter of 2026 (up nearly 5 percentage points over the last four years). Copart noted that its ability to deliver high auction returns actually encourages carriers to declare more vehicles as total losses because it is economically attractive to do so.
• Pure Sales at All-Time Highs: More U.S. insurers are utilizing "pure sale" (non-reserve) auctions, indicating a high level of trust in Copart's digital marketplace to find the best value.

International Growth & Ecosystem Cross-Selling

While the U.S. saw volume declines, the international insurance segment showed continued momentum.

• International Gains: International insurance units increased by 4.6%.
• The Network Effect: Management highlighted that non-insurance vehicles serve as an excellent funnel. Over the past three years, the strong majority of buyers who entered the Copart ecosystem to bid on a non-insurance vehicle ended up bidding on an insurance vehicle within their first 90 days.

The Insurance Industry's View on AI

During the Q&A, Liaw shared an interesting anecdote about how insurance carriers view artificial intelligence. He mentioned that carriers are "both excited and terrified of it." While insurers are exploring AI for marketing, underwriting, and pricing, they are highly cautious regarding claims. Copart emphasized that any AI deployment in claims must be thoughtful, auditable, trackable, and accountable—insurance carriers cannot rely on "black box" decision-making.