Insurance companies say distracted driving is taking financial toll on industry customers

Gleaner, The (Henderson, KY)

Aug. 26--People know they shouldn't text and drive, but many of them do it anyway. All you have to do is look around on the road to see it.

And whether or not you fall into that group of scofflaws -- Kentucky law prohibits the use of personal communications devices while driving -- you can expect to pay for the mistakes of those offenders.

Local auto insurance providers told The Gleaner that distracted driving, which now primarily involves using a phone or other electronic device behind the wheel, is costing insurance companies billions of dollars and the expenses are being passed down to consumers in the form of higher premiums.

"We represent several companies and they are singing the same tune," said James Roll, a Henderson insurance agent with Vaughn Insurance. "Rates are going up. Some insurance providers are seeing double digit increases. Most distracted driving accidents comprise 25 percent of their claims. Distracted driving can be anything from people texting and driving, watching videos or putting on makeup."

It's more than just annoying and costly.

"Distracted driving has increased," Roll said, and "fatalities have increased. They were on a decline but started coming up again in 2014. Claims of severity in accidents and injuries have increased because people who are texting and driving are traveling at full speed and they hit somebody and they aren't trying to use their brakes (to avoid the crash). Several months ago there was a story in the national news about a man texting and driving. He ran into a church van and killed several people."

According to an article published on the News Max website in May, State Farm Mutual Automobile Insurance Co., which is the largest home and auto insurer in the United States, took a $7 billion underwriting loss in 2016 on auto policies.

"I've been with Kentucky Farm Bureau Insurance for 32 years and I've seen it all," said local insurance agent Chase Fulcher. "But I have never seen an epidemic that the industry can't overcome. Statistics are showing that between 60 and 70 percent of vehicle accidents now involve distracted driving. The main source, these days of distracted driving, is the use of cell phones and people reading their iPads or people video chatting in the car."

"I saw a lady driving down the road the other day and she was reading her iPad," Fulcher said. "They are video chatting in the car. Grandma calls and says how are the kids and mom or dad says, 'Well they are in the back' " and people start video chatting.

Roll said 2016 saw financial issues in the insurance industry because of accident claims but in 2017 "we had a bigger impact."

"The companies are telling us that for every dollar they take in, they are spending $1.50 in claims so they have to increase rates to keep up with the costs. You can't stay in business if you put out more than you take in," he said.

"In 2015 the National Highway Traffic Safety Administration tracked a 7 to 8 percent increase in severe vehicle accidents which resulted in fatalities, or serious to life threatening injuries with people in intensive care," Fulcher said. "And those are just the worst accidents. We aren't talking about fender benders in a parking lot at County High. Many companies within the insurance industry are filing for rate increases."

To put this more in perspective he said, "Drinking and driving is a horrible thing. People drinking and driving are impaired, but some of them are trying to drive right. Most get pulled over because they are driving too slow. At least he or she is trying to drive right. Someone totally distracted isn't even looking ... People who are texting while driving, video chatting, they are 100 percent distracted," Fulcher said. "Everybody has one of these -- a mobile phone. So that's like everybody is driving drunk."

"When you see accidents at 60 miles an hour and no one even brakes because they are texting ... when you see the impact of this ... this is bigger than the insurance industry," Fulcher said. "It's bigger than the consumers because it doesn't look like anything is slowing it down. Even all the younger kids have devices."

The local insurance agents interviewed by The Gleaner said companies are reacting to this texting and driving crisis in more ways than just raising rates.

Fulcher said Kentucky Farm Bureau has launched a media campaign to remind folks about the dangers of distracted driving.

Roll and Nibby Priest, a Henderson insurance agent who also works with Vaughn Insurance, said they are seeing more technology being used to curb distracted driving.

"There are some things that insurance companies are doing to try and curb distracted driving," Roll said. "Some companies have gone to having drivers install an app on their iPhones which records whether you use the phone while you're driving. They are giving discounts to clients who aren't using the phone while driving."

Priest said there is also equipment called a Telematics device which is inserted into a port under the steering wheel, near where the brake and gas pedals are located.

"These little devices will monitor hard brakes, which is a sign of someone not paying attention while they are driving," Roll said. "It monitors rapid acceleration which might be someone who when the light turns green you gun it. It monitors the time of day you drive because they find that more people who drive between midnight and 4 a.m. are the problem people because maybe they are drinking and driving and things of that nature."

"Insurance companies are getting this data and are able to determine who should get a discount because of their safe driving," Priest said.

Gina Gish, another Vaughn Insurance employee said, there are significant discounts for those choosing to have things like the Telematics device in the vehicle. "The average discount is 12 percent. The highest I've seen is 17 percent. Most companies will send the insured notice that they're eligible for the discounts."

She said the insured can track their own performance and adjust their driving habits.

While the phone apps can tell if someone is using their phone while driving, the devices plugged into the port on the car aren't currently able to do that.

"But that technology is coming," Gish said.

"With the telematics, insurance companies aren't tracking where you go. The device is tracking time of day, hard brakes, quick starts, miles," she said.

The equipment is used to diagnose unsafe driving patterns.

"That's the biggest concern people have with these devices. People don't want insurance companies knowing the places they go," Priest said. "But we don't track where you are or where you frequent."

"I do not see this at all as an infringement on privacy," Priest said. "This is basically trying to give you the auto insurance rate you really deserve. If you are a really good driver, you get a good rate. If you have aggressive driving habits, you are going to get charged for it," Priest said.

"So instead of getting insurance rates based on age, you get them based on how you drive," Roll said. "That's fairer than the current system."

Priest encouraged people to check with an insurance agent to have their auto policy reviewed.

In addition, people over the age of 50 can get an insurance discount by attending a safe driver class sponsored by AARP.

"There will be a class in September and a class in October in Henderson. If those 50 and above take that four-hour class, regardless of their insurance carrier, Kentucky law says they will get a discount on their auto insurance," Priest said.

"Attendees do not have to take an exam, but it is proven to be a class that makes you aware of how you are driving. And if it can prevent you from having an accident or save you money or time off work then it's a good class."

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