Are Smartphones To Blame For Rising Insurance Rates?

In a study released this year by the Washington state Insurance Commissioner's Office, researchers found that rates for automobile insurance rose by an average of 5.9% in 2016. The study included the top 20 companies providing automobile insurance in Washington state. Across the nation, average premiums rose to $926, reaching the peak of a 16% increase in just the last five years.

Insurance companies have justified their rising rates by pointing to an increase in the number of accidents they’re expected to cover. In Washington state, fatal crashes involving marijuana use have been on the rise in recent years, even as arrests for driving under the influence have fallen. Although motor vehicle-related deaths have fallen across the nation recently, there were 508 fatal crashes in Washington state in 2016, and 122,337 motor vehicle crashes overall in the state.

Distracted Driving Is On The Rise

In 2016, the Washington State Department of Transportation estimated that 12,314 motor vehicle accidents involved distracted driving. Insurance companies are eager to blame distracted drivers as a major factor in rising premiums. "Insurers believe there is a correlation between distracted drivers and cell phone use in particular. Remember, it's not just fatalities going up. It's all auto collisions are going up," Kenton Brine, president of the NW Insurance Council, told reporters. "So, for insurers that are measuring costs, they are looking at not just the most tragic accidents but the minor fender benders too where people hit a tree, or curb, or something that causes damage to their vehicle.”

This means that even if fatalities and collisions involving serious injuries decline, insurance rates could continue to rise. While insurance companies occasionally must pay out hundreds of thousands or even millions of dollars after a car accident leaves a victim with severe injuries, most insurance claims are for less serious collisions. Most customers who are involved in crashes will submit smaller claims for property damage or mild injuries.

Moving Violations Mean Higher Premiums

Insurance companies also have a new incentive to raise rates in Washington state. Prior to 2017, Washington’s laws regarding distracted driving only covered sending SMS messages and holding a phone to your ear. While those restrictions were innovative when those laws were first passed, they didn’t anticipate the thousands of apps, messaging features, and other functions that smart phones would give users access to.

Just this year, Governor Jay Inslee signed a new distracted driving bill into law. This law bans everything except “minimal use of a finger” to activate, deactivate, or initiate a function on a cell phone. That means no more taking pictures, sending messages, or scrolling through social media while drivers are behind the wheel. In addition to creating a structure of rising fines for first-time and repeat offenders, the new law allows insurance companies to raise rates of customers who are caught driving while distracted.

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