April 2019

Car Insurance Companies Raise Penalty for Distracted Driving 10,000%

The Zebra's Annual Distracted Driving Report reveals how insurers nationwide penalize drivers for using their phones behind the wheel.

Insights based on 61,000,000 insurance rates
About

The Zebra’s 2019 Distracted Driving Report reveals that getting caught using a cell phone while driving is getting exponentially more expensive as car insurance companies are just beginning to penalize drivers for distracted driving.

Insurers consider risk and the likelihood that someone will file claims when they determine whether or how much to raise insurance rates. Because distracted driving is now illegal behavior across the country, a ticket or violation for distracted driving will be listed on a person’s driving record. So even after a driver pays the traffic ticket and possible court costs for a distracted driving citation, they still face theinsurancepenalty for the dangerous behavior — and that penalty is up nearly 10,000% since 2011. This cost adds hundreds or even thousands of dollars a year to a driver's auto insurance bill.

Car Insurance Penalties for Distracted Driving2011-2018

 


 

Auto Insurance Industry Raising Rates for Distracted Drivers

1. The insurance penalty for distracted driving is up nearly 10,000%.

2. Insurers in all states are now cracking down on distracted drivers — but inconsistently.

3. Distracted driving penalties are still miniscule compared to DUIs and other driving violations.

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 changed based on a behavior or other factor (in this case, a driving violation)

 


 

Key Finding 1

The insurance penalty for distracted driving is up nearly 10,000%.

Many factors affect your car insurance rates, and often the most significant is your driving record.

In 2011, 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%, costing them less than $3 per year in added premium. Now, the same violation will raise rates 19.7% (about $290) — a penalty increase of 9,750%.

 
INSURANCE PENALTIES FOR DISTRACTED DRIVING (DD) BY YEAR:
Year

Premium

Premium penalty for DD ($)

Premium penalty for DD (%)

Penalty increase over previous year

Penalty increase over 2011

2011

$1,194

$2

0.20%

2012

$1,276

$3

0.24%

20%

20%

2013

$1,195

$4

0.31%

29%

55%

2014

$1,229

$13

1.03%

232%

415%

2015

$1,280

$23

1.79%

74%

795%

2016

$1,368

$185

13.5%

654%

6650%

2017

$1,427

$226

15.9%

18%

7850%

2018

$1,470

$290

19.7%

24%

9750%

 

In comparison, the average penalty increase for all other violations including speeding, running a red light, or a hit-and-run was just 34% (or $494) from 2011 to 2018, and averaged 3% from one year to the next.


Key Finding 2

Insurers in all states are now cracking down on distracted drivers — but inconsistently.

As of late 2018, insurers in all states penalized distracted driving, whereas only 10 states did in 2011. Across the country, penalties for distracted drivingrange from just $87 in some states to $762 in others (5.5% to 56%). In some cities, the penalty nears $1,700.

Car Insurance Penalties for Distracted Driving by State

 

States with Highest Insurance Penalties for Distracted Driving:

  1. Vermont – 56% increase in annual premium (+$600/year)
  2. Montana – 33% (+$464)
  3. Oregon – 32% (+$440)
  4. Connecticut – 30% (+$463)
  5. North Carolina – 30% (+$289)
  6. Mississippi – 29% (+$446)
  7. Arizona – 29% (+$372)
  8. Maine – 29% (+$258)
  9. Michigan – 28% (+$762)
  10. California – 28% (+$510)

 

States with Lowest Insurance Penalties for Distracted Driving Violation:

  1. New York – 5% (+$93)
  2. Wyoming– 6% (+$87)
  3. Hawaii – 9% (+$94)
  4. Texas – 10% (+$177)
  5. Kansas – 12% (+$180)
  6. Maryland – 13% (+$167)
  7. Pennsylvania – 13% (+$179)
  8. Idaho – 14% (+$138)
  9. Louisiana – 15% (+$347)
  10. Delaware – 15% (+$276)

 

Key Finding 3

Still, distracted driving penalties are far less costly than DUIs and other violations.

Even though distracted driving insurance penalties are on the rise, they still pale in comparison with other risky driving 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 74%, or about $1,086, on average. 

Penalties for other violations, however, vary quite a bit – from those seemingly harmless tickets like driving too slowly to more reckless behaviors like a hit and run.


Distracted driving vs. drunk driving

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 different are these risks?

 

Costs

Distracted Driving

DUI

Loss of Life

9 people per day / ~3,500 people per year

29 people per day / ~10,000+ people per year

Economic Impact

$40 billion per year

$44 billion per year

Number of States with Laws Against Violation

47 + DC (texting while driving) / 16 + DC  (phone use while driving)

50 + DC

Legal Fine

Up to $500 for first offense

Up to $1,500 for first offense

Insurance Fine

$290

$1,086


 

Q&A

 

Why have insurers only just begun to raise car insurance rates for distracted driving violations, despite the proven danger?

Industry regulators must ensure that insurance companies are using fair methods to set rates; any changes they make must be justified and approved. Insurers 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 your driving record.

In the past three 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 accordinglyandthat they have substantial proof to convince regulators of the validity of their rate changes.

 

Will insurers continue to penalize distracted drivers?

If a risky behavior (such as distracted driving) is increasingly prevalent and has the potential to affect insurance claims, they will likely raise rates accordingly. What we know:

  • Americans are driving more than ever – trillions of miles each year – and in 2018 bought more cars than ever before.
  • Nearly everyone has a mobile phone. In the U.S. mobile phone use is approximately 82% and climbing, and smartphone use climbing even faster.
  • Drivers still aren’t putting their phones down. According to a 2017 study, drivers use their smartphones in 9 out of 10 trips, and are on their phones for 3.5 minutes of every hour on the road.

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. It’s important to recall, though, that these changes occur at the state level, so some states’ insurers may be “leveling out” how they penalize distracted driving, while others may continue to evolve their practices.


 

Methodology

This study examines data from The Zebra’s 2019 State of Auto Insurance Report, which analyzed 61 million auto insurance rates across all U.S. zip codes from 2011 to 2018 for a base driver profile representative of an average insured: a 30-year-old single male driving a 2014 Honda Accord EX.

Contact research@thezebra.com for more information.

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