As an insurance professional, one of my primary – and most enjoyable – responsibilities is to educate my clients. Not only do I want them to stay safe, healthy and financially secure, but also to get a good value when it comes to their insurance investments.
One area where premiums seem to be skyrocketing is personal automobile coverage. According to a 2017 article on Forbes.com, “since 2012, the consumer price index (CPI) for auto insurance has gone up by 21.5 percent, compared with a rise in the overall consumer price index of 4.5 percent.” Forbes characterizes the increase as “the largest five-year growth of auto insurance costs since the early 1990s.”
What is driving this huge increase in rates? A number of factors are responsible. First, decreases in gas prices versus prior years has encouraged more drivers to take to the road, which, in turn, leads to more accidents. Second, the insurance industry has borne huge costs due to the recent spate of natural disasters sweeping the country, which have destroyed hundreds of thousands of automobiles. Third, the price of repairs has risen as technology has evolved and cars are being updated with sophisticated – and expensive - electronics. Perhaps the biggest factor, however, has been the non-relenting increase in accidents caused by distracted drivers.
The National Safety Council (NSC) estimates that 40,200 people died in auto accidents in 2016. This number is up 14 percent from 2014, the largest two year increase in more than five decades. Distracted driving has increased as smart phones have become commonplace. The NSC now lists distracted driving as the third major cause of fatalities after alcohol and speeding. Death rates vary by vehicle type, driver age and gender, along with other factors.
Research by Travelers Insurance has shown that people may be doing a whole host of other things while driving, including texting, checking social media, reading directions, applying make-up, making calls, talking to back-seat passengers and eating. All of these activities require drivers to either remove their eyes from the road, take their hands off the steering wheel, or divert their attention from the task at hand. It stands to reason that these dangerous behaviors while driving lead to many more accidents, injuries and fatalities. The imminent arrival of driverless cars will undoubtedly further cloud the auto insurance market, adding more rate volatility and uncertainty to the mix.
While it is impossible for any one individual to tackle these problems, it is possible to learn to maintain proper focus when driving, and encourage others to do the same. Don’t be afraid to speak up if the driver of your car is more interested in talking on the phone than paying strict attention to the road. At the risk of being called a nag, remind your kids, spouse and friends, repeatedly, not to engage in these dangerous behaviors and be sure not to text them yourself when you think they may be behind the wheel.
General Insurance Services works to educate teenagers and their parents about the dangers of distracted driving. To learn more about our personal solutions, please contact us.
This article was published in the Spring 2018 issue of the General Insurance Services Risk & Business Magazine. Access the full publication here.