Study: Car insurance companies raise penalty for distracted driving 10,000%

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.

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 minuscule 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%.

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.

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?

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 2021 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