Over the past decade or longer, the risks associated with distracted driving have proven extreme and deadly. Despite the extensive research surrounding these risks and the pervasiveness of the behavior, however, the insurance industry has yet to raise rates for distracted drivers – until now.
The Zebra’s 2018 Distracted Driving Report reveals that for the first time since the advent of cell phones, car insurance companies are penalizing drivers who text or use their cell phones while driving. In fact, the average insurance penalty is up nearly 8,000% since 2011 – and it’s costing some people hundreds or even thousands of dollars on their annual premium. The report explores where insurance penalties for distracted driving have been spiking across the U.S. and by how much, as well as questions including:
First, a few definitions:
Violation: a traffic ticket that goes on your driving record which insurance companies use to assess your risk and determine your rates
Distracted driving: texting while driving or otherwise using a cell phone while driving
DUI: driving under the influence of alcohol or drugs
Penalty: the amount an insurance premium is raised for a specific rating factor (in this case, a driving violation)
Among the many factors which affect car insurance rates is an individual’s driving record. A ticket for distracted driving (texting or using your cell phone while driving) would have raised a driver’s car insurance rates by 0.2% in 2011, costing them less than $3 per year. Now, the same violation will raise rates 16%, or about $226 – a penalty increase of about 7,900%.
For context, the national average auto insurance premium rose 20% in the same time period – from $1,194 in 2011 to $1,427 at the end of 2017.
|Year||National Average Premium||Annual premium penalty for distracted driving (dollars)||Annual premium penalty for distracted driving (percent increase)||Penalty increase over previous year (percent)||Penalty increase over 2011 (percent)|
In comparison, the average penalty increase for all other violations was 33% from 2011 to 2017, and averaged 30% from one year to the next.
Despite the marked increase in the average insurance penalty for distracted driving, the cost – 16% or $226 – is still substantially lower than the cost of other driving violations, raising the question: how risky do insurance companies deem these behaviors?
Violations for driving under the influence of alcohol or drugs (DUI), for example, have consistently been among the most highly penalized driving violations over time and across the country. DUI violations raise rates 77%, or about $1,092, on average.
Still, the degree to which these rate changes are occurring is perhaps the greatest indicator of a shift in focus on distracted driving. Compared to a 7900% penalty increase for distracted driving since 2011, the average penalty increase for the following wide range of driving violations is just 57%:
Most people know that driving while intoxicated is highly dangerous, illegal, and will get them in big trouble if they’re caught. And many people know the same is largely true for distracted driving. So how do insurance companies view the risk these behaviors pose?
|Loss of Life||9 people per day / ~3,500 people per year||28 people per day / ~10,000+ people per year|
|Economic Impact||$129 billion per year||$199 billion per year|
|Number of States with Laws Against Violation||47 + DC (texting while driving) 15 + DC (phone use while driving)||50 + DC|
Both drunk and distracted driving involve driver negligence inside the vehicle which often leads to erratic behavior that can turn a car into a deadly weapon.
Between 1975 and 2016, minimum drinking age laws saved 31,417 lives, according to the NHTSA.
A 2014 study by the IIHS, however, concluded that despite the increasing number of laws limiting phone use, it’s unclear whether they are having the intended effects on behavior and crashes, citing unreliable police reports and the variation among type and enforcement of laws.
No doubt the human casualties are the greatest, and most tragic consequences of drunk and distracted driving. But if we’re considering the many repercussions of drinking and driving or texting and driving, there’s one cost drivers often forget: their car insurance rates.
A violation for either will take a hit on your car insurance rates – in fact, the penalty will affect your premium for three years* after the incident – but it hasn’t always been that way.
However, as we’ve seen above, a violation for texting or using a cell phone while driving has had only a fraction of that impact on car insurance rates. On average, penalties for drunk driving are 383% higher than for distracted driving. And some states have much more severe punishments for one violation than the other. In New York, a distracted violation adds just $2.51 to a drivers’ car insurance rate, but a DUI will cost them $1,207 – or nearly 48,000% more!
But that’s all starting to change.
Insurance Penalties: Distracted Driving (DD) vs. Drunk Driving (DUI)
|Year||Number of States with Insurance Penalty for DD Violation||Number of States with Insurance Penalty for DUI Violation||Insurance Penalty for DD (Dollars)||Insurance Penalty for DD (Percent)||Insurance Penalty for DUI (Dollars)||Insurance Penalty for DUI (Percent)|
|2011||10||50 + DC||$2.35||0.20%||$852.38||71.41%|
|2012||7||50 + DC||$2.35||0.20%||$852.38||71.41%|
|2013||9||50 + DC||$3.75||0.31%||$997.13||83.41%|
|2014||21||50 + DC||$12.63||1.03%||$968.97||78.83%|
|2015||26||50 + DC||$22.94||1.79%||$1,011.21||78.98%|
|2016||50 + DC||50 + DC||$184.64||13.49%||$1,121.86||81.98%|
|2017||50 + DC||50 + DC||$226.36||15.86%||$1,092.31||76.53%|
(As always with insurers,) it’s about risk. In order to predict whether the rising penalties for distracted driving behavior will continue, we need a better understanding of why – or why not – insurers might consider a certain behavior risky, if that behavior is likely to change, or if certain measures might help curb that risky behavior. Let’s break it down:
Insurance industry regulators must ensure that insurance companies are using fair methods to set rates, so any changes they make must be justified and approved. Insurance companies consider many rating factors to determine rates – information to do with what kind of car you drive, where you live, driver characteristics (age, gender, etc.), and of course driving record.
We can likely assume that in the past two years insurance companies have determined they have sufficient data about the riskiness of drivers who receive distracted driving violations on their driving records to raise rates accordingly and that they have substantial proof to convince regulators of the validity of their rate changes.
Distracted driving is really the only new violation impacting driving records in the past several decades, brought on, obviously, by the spread of handheld phones. And although cell phones and even smart phones might not seem new to most drivers in this day and age, the insurance industry has likely been monitoring the risk they pose, following the laws enacted to prevent and punish the behaviors, and assessing the losses (property and human casualty) to determine how to price that risk appropriately.
When we think about the deterrents to this kind of behavior, unfortunately people often think of the associated monetary costs. For example, a DUI can cost a driver thousands of dollars in fines, attorney fees, and alcohol abuse education, among other expenses. As we’ve reported, the violation will also keep their car insurance rates an average of more than $1,000 higher each year for three years – that’s another $3,000 or more right there.
And drunk driving behavior is changing. According to the NHTSA,5 the number of alcohol-related fatalities decreased 20% nationally between 2007 and 2016. Between 2015 and 2016, however, they increased 1.7%. (2017 data is not yet available.)
Of course some might say “correlation does not equal causation,” and that may be true, but it would be hard to argue that increased awareness and penalties for drunk driving have had no bearing on its decline.
What we do know is that over time, insurers (among others) have continued to penalize drunk driving, and the casualties associated with drunk driving have decreased. If there’s a chance to create the same impact with distracted driving, many argue harsher penalties would be more than worth it.
In short, probably not. If laws are any indicator… yes.
The insurance industry is data-driven and intentional – and regulated to be so – when it comes to assessing risk and setting auto insurance rates. Given the amount of data pointing to the continued risk distracted driving is likely to pose, drivers may likely expect insurance penalties for distracted driving to continue – if not increase – in the coming years.
1Center for Disease Control (CDC)
2U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA)
3Insurance Institute for Highway Safety (IIHS)
4Governors Highway Safety Association
5NHTSA 2016 Fatal Motor Vehicle Crashes: Overview
6NHTSA’s Fatality Analysis Reporting System (FARS)
7Statista United States Mobile Phone Penetration 2014-2020
8Statista Smartphone Penetration in the U.S. As Share of Population 2010-2022
9Zendrive Distracted Driving Behavior Study