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Orlando Sentinel: State viewpoint: What are the reasons behind rising auto insurance rates in Florida?

Tuesday, March 22, 2016

The next time you’re stopped at a traffic light, take a look to your right and there’s a pretty good possibility the driver next to you is texting. Look to your left, and you may see a pedestrian glued to his cellphone while attempting to cross the street. These types of distractions not only threaten your safety and the ones you love, but they also might be impacting your auto insurance costs — and at an alarming rate.

Since 2013, Florida has experienced the fourth-highest increase in auto accidents in the nation. This comes at a time when the cost of accidents is increasing — from rising medical-care costs to higher expenses for repairing more sophisticated cars. While safety is always our first concern, these frequency and severity trends also could be hitting your families’ pocketbooks.

Florida is at the leading edge of a nationwide trend on increased accident frequency that began in the last quarter of 2014, but dramatically accelerated in 2015.

Over the past decades, automobiles have become significantly safer with major advancements in airbags, safety belts, and new accident-avoidance technology. So what is causing this rise in accident frequency?

PCI policy analysts have conducted extensive research on the subject. We’ve found that the leading factors for the rise in accidents here in Florida can be attributed to distracted driving and traffic congestion. Recently, Warren Buffett said that distracted driving also is a major national factor in this significant rise in auto accident frequency across the country.

David Sampson is the the president and CEO of the Property Casualty Insurers Association of America.

And a new national phenomenon — distracted walking — could be another factor leading to increased auto accidents. A distracted pedestrian in an intersection threatens the safety of those on foot as well as motorists and passengers. According to Geoffrey Fowler of the Wall Street Journal, emergency-room visits from distracted pedestrians spiked 124 percent from 2010 to 2014. Research from the University of Buffalo went so far as to conclude that distracted walking results in more accidents per mile than distracted driving.

The increase in frequency of auto accidents comes at a time when claims costs associated with auto accidents are becoming more devastating and more expensive — increasing the severity of accidents.

Let’s talk more about accident severity. Last month, the National Safety Council estimated that motor-vehicle deaths in Florida for 2015 increased 18 percent compared to 2014. Nationally, they estimate that motor-vehicle deaths were 8 percent higher in 2015 than they were in 2014 — the largest annual increase in 50 years.

Today’s cars are safer — but more sophisticated parts are more expensive to repair. New cars are equipped with advanced computers, which are more expensive to repair due to more advanced diagnostic tools, specialized training by technicians, increasing labor costs and repair parts.

We also are seeing increased costs driven by medical care. Since 2005, insurance claim costs for bodily injuries have increased by 40 percent nationally, higher than the increase in the Consumer Price Index for medical care.

Increased frequency of accidents and increased severity of the accidents make for a bad combination for insurance consumers. Up until the past few years, the increase in claims costs was offset by a decline in the number of claims filed. This helped keep insurance costs stable for consumers. However, these new trends are now combining to put upward pressure on costs.

Where’s the good news? There are a number of ways that motorists, policymakers, insurers, and car makers can work together to make roads safer and keep insurance costs stable. The keys are addressing the unsafe activities that cause crashes and supporting innovative technologies that protect drivers.

In Florida, distracted-driving crashes have increased by 25 percent since 2012. The implementation and enforcement of distracted-driving laws, which discourage texting while driving and ban handheld cellphone use, are important first steps. We also must continue to educate motorists about the dangers of driving under the influence of not just alcohol, but also recreational and prescription drugs.

Accident safety has made tremendous progress over the past few decades. Similarly, the development and expansion of collision-avoidance technology show promise in reducing the kind of low-speed accidents that occur mostly in dense traffic.

Driving in Central Florida can be complicated enough. Let’s continue to work together to keep motorists and pedestrians safe — and keep insurance costs low.

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