auto insurance

Distracted driving caused an average of nine deaths a day in 2015 according to the Center for Disease Control.  Grant sits down with Kristy Whipple to discuss distracted driving, how it's being combated and the future of auto insurance.



Below is a transcript of the episode, modified for your reading pleasure. For more information on the topics discussed in the episode, see the links at the bottom of this post. 

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Grant FINLEY: Welcome to Your Insurance Connection Podcast.  I'm your host, Grant Finley, joined by Kristy Whipple.  Kristy, how you doing today?


Kristy WHIPPLE:  Hi, Grant.  Good, thank you.  How are you?


FINLEY:  I am very well, thank you.  Today I want to talk about something that is getting a lot of attention lately, and that would be distracted driving.  I can turn it over to you and we can jump into why it's relevant now.  I guess I'll just start with a few statistics though.  I was looking at the CDC website, that's the Center for Disease Control and they had their 2015 statistics, which I presume is their most recent findings and approximately nine people were killed every day and more than 1,000 injured every day in distracted driving related accidents.  That means - everyone's got a smart phone in their hand these days when they're driving.  People - 45% I think is the number I saw of teens who admit to texting while driving.  Now, that's the number who admit to it.  I'm sure there's a lot more who don't.  I don't know if I let the cat out of the bag, but let's just talk about why distracted driving is getting so much attention lately.


WHIPPLE:  For me, from my perspective, I think the reason that it's gaining so much attention is because last year pretty much every personal lines auto insurance carrier decided to have massive rate increases.  The impotence for the rate increases, the reason for them, number one is always distracted driving.  That's what the claims experience has been.  That's what their claims are paying for so that's their number one reason.  Another secondary reason, and not so much related to distracted driving, although I guess it could be, is the technology in the cars.  The technology is causing increases in repairs.  So for example, if you have a camera and sensors in your bumper in your 2014, 2013 model year whatever vehicle it is and you have an accident, you're rear ended in that, that bumper is going to cost about $3,000 to replace.  Where as ten years ago it might have only been $1,000.  However, the distraction is not only because we have the phones and that kind of thing, but because we have the little screens in our cars now and we're trying to see what song is playing.  I don't think all the cars allow you to operate the navigation while you're driving, but that could be part of it too.


FINLEY:  Yeah, well there are three types.  Again, this is according to the CDC.  Three types of distracted driving and they are visual.  So if you take your eyes off the road, which, you know, look at your NAV or you're looking at your phone.  Manual, where you take your hands off the wheel.  So if you're trying to hit your kid in the back seat or messing with the navigation - 


WHIPPLE: Or you spill your drink or something.


FINLEY:  Right, yeah.  And the third one being cognitive.  So if you're getting lost in your thoughts and drifting off and you're not focusing on the task of driving.  So now we've got - let's just put a flag in those.  I was actually going to ask about the tech versus the amount.  Do you think those increases are - is it just a rise in the amount?  It's rising so fast that they can't keep up or do you think it's more laden in that technology and how things are more expensive to repair?


WHIPPLE:  Well, it's not necessarily severity as it is frequency.  What started out as people going back to work after the collapse in 2008, getting jobs again so there are more drivers on the road, those people are being paid so they're taking - they're driving around more, they can afford to buy gas, the price of gas has gone down.  That's a frequency issue.  However, then, it appears as though in the last couple of years the severity has increased and that has to do with the price of replacing parts and the new vehicles.  The severity is the amount that's paid on the claim.


FINLEY:  So it's a two-fold problem.


WHIPPLE:  Yeah, so that's one of the underlying causes that the industry refers to.


FINLEY:  So, we all see the PSA's - I can always picture the rainbow with the star, "the more you know" on NBC or whatever.  PSA's have been around forever and I'm sure - I don't watch much television now, but I'm sure there's still stuff about distracted driving.  Or  you see the billboard on the road that says, "Are you seriously not buckled up right now?"


WHIPPLE:  Right, yeah.


FINLEY:  What's being done to fight this?  Can you point to some specific examples?


WHIPPLE:  Well, there are communities that have laws on the books that make it illegal to text and drive but you can't get a ticket for that unless you're pulled over for something else from what I understand.


FINLEY:  See, I know I drive with my phone in my hand sometimes.  I'm twirling it in my hand or something, I'm not necessarily using it and if I ever pass an officer I always think twice.


WHIPPLE:  Throw it down...


FINLEY:  "Whoa, am I allowed to have this visible or am I going to be..."


WHIPPLE:  So you throw down your phone before you slam on the break. (Laughter)


FINLEY:  Right! But how would you even - that's got to be difficult to police, texting and driving.


WHIPPLE:  Well, and I think, the only manufacturer I'm really familiar with is Ford, but I do know that for some of their newer models of the cars that they have a thing called "MyKey" so that, and this is the case with my daughter's 2014 Ford Focus.  She has a MyKey and so her dad and I can program it to restrict her only going so many miles per hour.


FINLEY:  Really?


WHIPPLE:  Yeah, or staying out until a certain time.


FINLEY:  Like the car won't turn on after a certain time or how does that work?


WHIPPLE:  I don't know.


FINLEY:  You haven't gotten into that.


WHIPPLE:  But we can access the information that's collected while she's driving the car to get feedback or definitely to restrict - I think it would restrict her mileage and that kind of thing.


FINLEY:  And you can see where the car is?  Does it have GPS on it too?

 

WHIPPLE:  I don't think it does.  I don't remember that much from it.

 

FINLEY:  Can you point to any programs that states are doing or federal government is doing to try to combat this other than -

 

WHIPPLE:  Making laws.

 

FINLEY:  Right, but how effective are those?  I feel like the number one deterrent is going to be - or the most effective maybe is going to be once it hits that tipping point and everybody's talking about it or everybody's aware of it and it's just common sense.  "Put your phone away" or whatever it might be.  Or maybe there's an app that senses when it's going at a certain, like 25 miles per hour or something and it locks up and you can't access it.

 

WHIPPLE:  Our out of a certain geographical location.  I think that's a thing too where you can program your child's phone and draw a circle on a map to say where they can or cannot go out of and once they leave that boundary it notifies your phone.  I don't know if there is technology that recognizes when a car is being driven that it will disable the phone.  It seems like there is.

 

FINLEY:  If not, we just gave ourselves a billion dollar idea so we should probably get that started.

 

WHIPPLE:  There probably is because that's usually my luck where I think of something after it's already been invented.

 

FINLEY:  Yeah, I'm sure of it.  I would be remiss, just because I think it's a fascinating topic and I know we've talked about it off the podcast and around the office, but the future of the auto industry.  Driverless vehicles, autonomous cars, etc. I don't know where that's going, obviously.  I would consider myself somebody who's in favor of it.  I've never ridden in a driverless car but I feel like it's going to take hold on the simple fact that statistically, the amount of deaths and accidents are going to dramatically decrease and I feel like distracted driving is a problem now but maybe in 20 years, obviously we want to curb it as soon as we can but maybe in 20 years people aren't even driving anymore?

 

WHIPPLE:  Right, yeah and so they would have plenty of time to sit in their vehicle and play on their phone or do whatever it is that they want to do while the car is driving them to their location.  And certainly in 20 years the driverless car is going to be somewhat perfected.  I don't think - yeah, maybe it won't be such an issue and then, as far as the effect on your auto insurance in 20 years, if you have a driverless car the insurance for the car is supposed to be supplied by the manufacturer of the car.  So is that something that the price of your car is going to include your policy for the life of the car or do you pay a premium every year to the auto manufacturer, or that kind of thing?  So that will put the liability off on the manufacturer and not on an insurance company anymore so maybe for those of us who still have our old 2015 Chevy Impala, our rates are going to go down significantly because we're not having to insure all the people who used to be out driving around while they were texting and making Facebook posts and stuff like that.  Telling people they just ate chips and salsa at El Nopal or something.

 

FINLEY:  Those are good chips and salsa too.  I wonder, and we're getting a little off topic from distracted driving but I wonder how many people will actually own cars in the future?  If everything is autonomous I can imagine a little cottage industry - maybe Uber or something takes over where it's just a driverless, pick up, drop off and then you're a lot more efficient with your - because right now, cars sit the majority of the day so you could have less cars and get more out of them without drivers in them.  

 

WHIPPLE:  Yeah, so then you would almost be going back to the - it would almost be like going to mass transit where it just picks you up at your house or maybe it just picks you up at the corner or something.  Kind of like the school bus.

 

FINLEY:  Right.  Yeah.  Who knows?  Then watch Netflix on your phone on the way to work.  Why not?  

WHIPPLE: Yeah (laughter)

 

FINLEY:  Alright, well let's try to dial it back in here.

 

WHIPPLE:  Yeah, I think distracted driving is pretty cut and dried.  It's - A, it's driven up our auto rates significantly and it's going to continue to do that until the insurance companies are at least maybe only paying out 85 cents for every dollar that they collect and that will be a couple years.  So the rates are going to continue to go up.  B, quit doing it.  (laughs)  And maybe there's going to be some sort of an interface in the newer vehicles in the next few years that when you start your car it disables your phone.  Kind of like when you go to an ER and you have your cell phone and you have no service.

 

FINLEY:  Yeah.

 

WHIPPLE:  Except that would conflict with all these cars that are being sold with built-in WiFi.  So, I don't know.

 

FINLEY:  Well, can you talk about State Farm and how much money they lost last year in their auto business and - I don't know that you would know the exact number but how much do you think can be attributed to -

 

WHIPPLE:  It's like seven some billion.

 

FINLEY:  Billion.  With a "B".

 

WHIPPLE:  Yeah.  They've lost more than a lot of companies value - the value of the entire insurance company.

 

FINLEY:  And it's just in auto?

 

WHIPPLE:  Yeah.

 

FINLEY:  And how much of that do you think is because of distracted driving and like we were talking before about those raised -

 

WHIPPLE:  Who knows?  I don't even know if they have statistics on how much of that is attributed to distracted driving.

 

FINLEY:  All right, well, I think we can probably wrap up our distracted driving talk and we'll just leave you with a few pearls of wisdom from Mrs. Whipple here, Mama Whip.  What should people go away from this episode remembering about distracted driving?

 

WHIPPLE:  Put your phone down while you're driving!

 

(Laughter)

 

FINLEY:  Save everybody the trouble.  Just put your phone down and we'll all be better off for it.  All right.  Kristy I want to thank you for taking a few minutes and sitting down with me today.

 

WHIPPLE:  Thanks, Grant.  Thanks for your time.

 

FINLEY:  And if you guys have any questions - certainly if you need insurance we're here,  obviously that's what we do.  We're happy to write you but even if you just have questions about anything that you might be curious about.  We've got some talented people in the office who can answer any of those questions you might have so give us a call.  Otherwise, thanks for listening and we will catch you on a later episode.

 

Your Insurance Connection podcast can be heard on iTunes and Stitcher or by visiting clhins.com/content/podcast. If you like what you’ve heard you can support this podcast by rating and/or sharing it on your social platforms. CLH Insurance is a “Trusted Choice”, independent agency servicing Missouri, Kansas and Illinois. For more information on CLH Insurance, visit clhins.com or call 636.391.0700 to speak with an agent. Until we connect again, thanks for listening. 

 

 

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Show Notes - Where you can learn more about the people and ideas discussed in this episode. 

Center for Disease Control 2015 Statistics

Missouri Traffic Safety Laws - Texting and Driving

Kansas Texting and Driving Law

Illinois Texting and Driving Law

Ford MyKey 

State Farm Lost $7 Billion in Auto Insurance in 2016

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