Distracted driving is pushing auto insurance premiums higher

Published: February 21, 2017

Updated: July 24, 2018

Author: Luke Jones



Distracted driving is a cause of concern for the global auto insurance industry. A new report from the Wall Street Journal shows that in the USA, distracted driving is pushing car insurance premiums ever higher. Far from being unique to the United States, this trend is observed in other markets, including Canada.

The reason for costly auto insurance premium hikes is the increased number of collisions, making drivers more dangerous. Authorities in the US point to distracted driving as the chief cause of this increase. More specifically, the use of mobile devices to talk, text, and access the internet while driving is the most concerning traffic issue at the moment.

As the number of connected devices continues to rise, the car will soon become an environment of in-vehicle systems and connected technology. More distractions are coming, while continued smartphone use is a problem. Many drivers are not scared of the penalties of distracted driving as they would be impaired driving.

Because the number of distracted driving collisions is increasing, insurance companies cannot keep up. Indeed, while premiums are increasing, WSJ suggests they are not increasing fast enough to keep up with the costs of collisions. This will lead companies to further increase rates.

It’s “an epidemic issue for this country,” says Michael LaRocco, chief executive of State Auto Financial Corp., at an insurance-industry conference last month.

State Farm Mutual Automobile Insurance Co., provides more coverage to US customers than any other provider. A survey conducted by the company in 2015 shows 36% admit to texting behind the wheel, while 29% says they access the internet.

While this is a snapshot of the insurance market in the US, it also mirrors the situation in Canada. Insurance companies in Canada are struggling amidst increased collisions from distracted driving. Moreover, the war against distracted driving is tough to fight. The infraction does not carry the same social stigma as being caught drink driving.

Insurance companies are starting to be more aggressive when punishing offenders. Increasing premiums substantially and deeming distracted drivers as high risk is one way to start combatting the indifference some motorists show to the problem.

SOURCE: https://www.wsj.com/articles/smartphone-addicts-behind-the-wheel-drive-car-insurance-rates-higher-1487592007