New York Injury Law Blog

Distracted Drivers Costing Insurance Companies Millions

Distracted driving is a problem that is only getting worse – and the issue is starting to cut into the bottom line for insurance companies.

According to a recent news report, the nation’s largest auto insurer, State Farm Insurance, experienced a $7 billion underwriting loss last year. There are a number of factors at play, but State Farm places much of the blame on distracted driving accidents.

A variety of distractions cause crashes, and the number of people using smartphones while driving is increasing every year. According to the U.S. Department of Transportation, text messaging is the most alarming kind of distracted driving because it requires “visual, manual, and cognitive attention from the driver.”

What Is Distracted Driving?

 Distracted driving is driving with divided attention. Distractions that can divert your attention from driving include:

  • Texting
  • Using a cellphone or a smartphone
  • Reading
  • Using your GPS
  • Watching a video
  • Adjusting the radio or climate control
  • Eating or drinking
  • Grooming

A 2015 survey found that drivers engage in a variety of surprisingly dangerous distracting behaviors while driving – like hanging clothes, brushing teeth, playing the guitar, and taking selfies.

The survey results also showed that one-third of drivers admit to texting while driving, and three-fourths say they have seen someone do it.

Car Crashes Are on the Rise

According to estimates from the National Safety Council, the number of motor vehicle fatalities increased 8% from 2014 to 2015 – the highest year-to-year increase in a half-century. The Department of Transportation and other agencies say that the increase could be due in part to the fact that people are driving more, but according to National Highway Traffic Safety Administration (NHTSA) chief Mark Rosekind, texting while driving is also increasing.

NHTSA statistics show that in 2014, 3,179 people were killed and 431,000 injured in vehicle crashes involving distracted drivers. And in a corresponding fashion, the percentage of drivers texting or visually manipulating a handheld device increased from 1.7 percent in 2013 to 2.2 percent in 2014.

Another factor driving up the cost of insurance for insurance providers is that people are driving more with gas prices staying low. Many Americans are buying luxury cars —expensive, high-tech cars — and these cars are much more expensive to fix when they are damaged in an accident.

A study published by NHTSA found that car crashes cost around $871 billion per year in economic loss and societal harm. Of that amount, distracted driving, which is underreported, accounts for $129 billion.

The best way that you can help reduce the number of accidents due to distracted driving is to avoid distractions yourself and educate others about the danger. You can set rules for your teenagers, take your significant other’s phone away if they are using it while driving, or take a stand if friends and peers are engaging in distracted driving. Your safety depends on it.


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