And it’s because of… more jobs?
As unemployment drops and more drivers hit the road for work, there’s more kinds of hitting going on than we’d like.
The Insurance Information Institute, or III, says both the frequency and cost of auto claims are up over the last two years, making insurance companies consider raising the costs of premiums.
“There has been an alarming increase in crashes and claims reported. This, combined with the cost of the claims themselves, has led to a dramatic rise in the overall loss cost,” says III’s white paper. “An improving economy put more cars on U.S. roadways as a growing number of Americans found employment, the III found, citing federal data showing the miles driven annually grew in recent years for the typical driver.”
It turns out the lower our unemployment rates, the higher our collisions. Fatal crashes were up more than 7 percent from 2014 to 2015. The last time fatalities jumped that high was in 1966 — there was an 8 percent jump from the year prior.
Because of the increase in collisions and fatalities, insurance premiums and policies could see a jump in cost. If there’s a rise in claim costs, you may see a rise in overall policy costs.
III says that insurers have seen losses grow more than 37 percent in a decade. However, expenses rose nearly 14 percent over the same time period. In 2012 and 2013, when the number of people employed was lower than it is today; the number of collision claims were also at its lowest. As employment grew, so did the number of crashes.
Is it because of jobs or something else?
Yes, there is such thing as too much of a good thing. Lots of employees heading to work is great. Except that it means more traffic and a higher expectancy of car crashes. But more people on the road may not be the only reason for a jump in collisions.
III says the increase in distracted driving could also be a big reason why collisions are rising. According to the National Highway Traffic Safety Administration (NHTSA), more than 3,000 people were killed in 2014 due to distracted driving. More than 430,000 were injured for the same reason.
“As smartphones have become ubiquitous, concerns have grown,” III says. “Forty-six states and the District of Columbia have banned texting while driving. Fourteen states and the District of Columbia ban drivers from using handheld cell phones.”
Last year, the National Safety Council released a survey that showed that 74 percent of drivers use Facebook while driving. In the same survey, 72 percent of respondents said their driving experience wouldn’t change if there were no technology available to them while on the road (24 percent said it would be a much better driving experience).
Despite the high usage, 75 percent of respondents said that their technology use didn’t put other drivers at risk, but 67 percent admitted they were at risk because another driver was distracted by technology.
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Article last modified on January 22, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Auto Crashes are Up, So Insurance Is Going Up - AMP.