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Distracted Driving: a new and unwelcome development

June 12, 2017

After several years of fairly steady automobile insurance rates consumers are noticing that their automobile insurance renewal rates are climbing, even for those who have unblemished driving records. In March the auto-insurance-related Consumer Price Index monthly data showed prices rose 6 percent year-over-year, which was the largest year-over-year increase since October 2003 when automobile insurance prices rose 7.2%. This has implications for the affluent beyond the burden of paying higher automobile insurance rates. Americans are driving more, but they are also distracted more than ever before, leading to an increase in collisions, both minor and serious. The spike in accidents which has caused this increase should be a warning to affluent drivers to be sure adequate excess liability limits are in place.

Stories of accidents caused by distracted drivers are sadly almost routine. Some are more tragic than others, such as the March 29 crash in Texas which killed 13 senior church members returning from a conference. An eyewitness filmed the erratic driving of a motorist and footage reveals the horrified driver and friend pleading with emergency operators to send out the police before the tragedy they were unable to prevent ultimately unfolded as they continued at a safe distance behind. After the crash the driver, who survived, apologized to the police for texting while driving.

Last year Warren Buffet made headlines talking about the costs of distracted driving. An increase in road fatalities hurt profits at his automobile insurance division. “If cars are better – and they clearly are – drivers must be worse.” This is something that should concern every driver. According to the National Safety Council, in 2015 distracted driving accidents were responsible for 26% of the road fatalities behind alcohol (30.8%) and speeding (30%).

The Chicago Tribune reported (3/31/17) that the number of motor vehicle deaths in the U.S. last year topped 40,000 for the first time since 2007, according to the National Safety Council.

If you have ever said the following to yourself:

1) We don’t have children of driving age and are therefore not at risk of a large liability lawsuit.
2) I am a careful driver and hardly ever drive and therefore won’t have an accident.
3) I don’t need excess liability because I would never drive under the influence of alcohol or drugs.

Think about the following:

Awards and settlements for distracted driving (without the influence of alcohol) have surpassed $10 million. In 2015 a California jury returned a verdict of $19 million for a distracted driving accident resulting in catastrophic brain injury. In 2012 an Alabama jury awarded $13 million for spinal injuries where the driver was texting at the time of the crash. It is important to remember that this does not include the cost of defense, which in cases like these will also tally in the millions of dollars.

Even though most drivers would not consider driving under the influence of alcohol, many drivers are quite happy to send texts or emails from their ever-present smart phones. Distracted driving has become so widespread that it is on track to overtake alcohol as the leading cause of traffic accidents.

Be sure you maintain adequate limits of excess liability to protect your exposure to creditors. We at Chartwell Insurance Services like to remind our insureds that excess liability coverage is, relatively speaking, the least expensive insurance coverage available – lower than the cost of property, automobile and jewelry coverage. Don’t “self-insure” (we mean go without) the appropriate limits of excess liability. Instead, select high deductibles, reduced jewelry coverage and even liability only on automobiles when looking to economize on the cost of your personal insurance program. Large accidents rarely happen. Don’t risk financial hardship if the unfortunate does happen.

Sincerely,

Rebecca Korach Woan

Chartwell Bulletins are produced by Chartwell Insurance Services, Inc., an independent insurance broker specializing in the personal asset protection of high net worth individuals. Chartwell Bulletins address issues of general interest and since coverages vary by company and by state should not be taken as an interpretation of a particular policy or advice on any individual situation.

A representative of Chartwell Insurance Services will be pleased to discuss all aspects of your personal insurance. Contact: Rebecca Korach Woan 312-645-1200 or rwoan@chartwellins.com