By 2011 over 50% of drivers owned a smartphone. The Wall Street Journal cited a survey conducted by State Farm Mutual Automobile Insurance Co., the largest U.S. auto insurer by market share, 36% of the people it surveyed in 2015 admitted to texting while driving, and 29% said they access the Internet, compared with 31% and 13%, respectively, in 2009.
During this period of time, the percentage of auto premiums paid to claims had increased by almost 15%. In other words, since drivers have access to smartphones, we are having many more accidents!
We thought all of the new safety features on today’s “smart” cars would reduce the number of accidents, right? Wrong. At least not enough to offset the influx of distracted driving. In fact, these new cars are only more expensive to repair with all of their electronic gizmos.
So, where is this going? Insurance companies are definitely looking for ways to offset the increase in losses they are suffering. One thing they have already done is raise auto insurance rates which I am sure you have already noticed.
The other thing I predict is coming is the installation of driver tracking devices in cars. The Progresseive “Snap Shot” already does this to some degree.
The only way insurance companies can reward good drivers with lower premium is by monitoring who is driving safely and who is not. (Que the ominous background music.) With technology becoming more available and inexpensive, it would only make sense for companies to install a tracking device on a vehicle to help justify the insurance premium.
Drivers will have to be willing to give up some of their privacy to save money on insurance premiums.
Many people like to blame the increase in auto insurance premium on uninsured drivers. While this is a major problem and contributor to the cost of insurance, the number of uninsured drivers is about 1 in 4. That’s about the same as it was 10 years ago.
There will always be people who make bad decisions that the rest of us get stuck paying for. People driving under the influence of their smartphone is contributing to the increase of auto insurance premiums in Oklahoma as well.
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