Drivers in Louisiana are learning a hard lesson when it comes to their commuting habits as the state’s largest auto insurers have been forced to crank up premiums, and it’s a trend being mirrored on a nationwide level. The increases have come as a result of more accidents and a spike in claims costs and the trend comes down to one major factor – distracted driving. The bottom line? Smartphones and tablets are costing you higher insurance premiums and causing havoc on the roads.
“We’re seeing it play out all across the nation,” says Louisiana Insurance Commissioner, Jim Donelon. “It’s universally attributed to a combination of distracted driving, cell phone use while driving, and more miles, cheap gas.”
Donelon says auto insurance premiums stayed essentially flat over a five-year period with increases of around 1 percent annually until, about five years ago, when all that changed. Donelon says that Louisiana’s auto insurance have been rising at a startling rate. He says premiums paid by drivers jumped, on average, 8 percent in 2016 alone. While he says it’s still too early to say with certainty how much rates will rise in 2017, he hopes that the trend could level off soon.
State Farm is the largest insurer in Louisiana, and they cover more than 1.1 million policyholders. The company raised rates an average of 13.5 percent as of Jan. 30, and a year previously, those rates jumped an average of 8 percent. Other companies were also impacted as Progressive Security raised rates more than 4 percent early 2016 then more than 9 percent later that year. Allstate followed suit with rate increases which averaged more than 9 percent during 2016. Other insurers say those increases don’t fully reflect the reality of the problem and filings with the state Insurance Department in Lousiana from some providers say a 19 percent increase is fully justified.
The number of miles driven in the United States rose more than 3 percent during 2015, and that represents the largest increase in that figure for more than 20 years. The number of accidents jumped almost 4 percent, and the National Highway Traffic Safety Administration says that from 2011 to 2015, the total number of accidents leaped up almost 18 percent.
The result was, at least in Louisiana, auto insurers saw claims costs ramp up from more than 67 percent of the $2.0 billion total in premiums paid for 2011 to nearly 77 percent of $2.3 billion taken in during 2015.
While innovations like cameras in each car mirror might eliminate blind spots and touchscreen displays, front collision warning systems and multi-airbag systems have increased safety for drivers and passengers, the impact of distracted driving now accounts for some 10 percent of traffic fatalities. In Lousiana, that distracted driving makes up nearly 20 percent of fatal crashes.
Experts blame distracted driving on “smartphone activities” like watching videos, reading, texting and talking and adjusting various in car and phone based sound systems. They say smartphone usage is overwhelming the best of the latest accident-prevention technologies included on many cars and trucks.
“I’d say over half of the wrecks we see people (claiming on their insurance) – they won’t admit to it – are from distracted driving. And distraction is usually their phone,” said one insurer.
For his part, Donelon says there may be some light at the end of the tunnel and adds that there are reasons to believe the current spate of big increases may end soon.
Stock analysts and investors recently heard, during one insurer’s conference call on the matter, that “the spike is over and rates have stabilized at a new norm.”
Another interesting element of the distracted driving problem is, that while teens say they don’t like texting while driving, they still do it themselves.