Pricing Insurance to Reflect Distracted Driving Risk

By | April 24, 2018

  • April 24, 2018 at 11:43 am
    PolarBeaRepeal says:
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    Please note, as actuaries would likely say, that the data on this peril is immature, thus the (relative) premium component is not fully understood and priced properly…. The article stated it changed from $23 a few years ago to $226 now. Let’s wait a while for the data to mature and grow to volumes which are fully credible to properly price this ‘risky behavior’.

    • April 24, 2018 at 3:09 pm
      Rosenblatt says:
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      ….but don’t you have to start SOMEWHERE, especially since using cell phones behind the wheel is clearly a dangerous activity that’s happening RIGHT NOW? Put a price on it now and adjust it in the future as more data is available (e.g. anti-theft discount). Why should the industry wait for the data to mature and grow BEFORE they being pricing it? Solely using reactionary pricing doesn’t work too well in this industry.

      • April 24, 2018 at 4:02 pm
        CarrierGuy says:
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        Well, state regulators take a dim view of carriers pricing against risk they can’t measure. Even with actuarially sound factors like education, states either disallow them, or make it so hard that carriers give up and go along with the “no discrimination” storyline.

        Distractions generated by mobile phones are real, but until our industry can get some real data, it will be hard to price it in without regulators crying foul.

        • April 24, 2018 at 5:05 pm
          PolarBeaRepeal says:
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          I believe it’s included in the claim data used to price the total of all perils/ claims level. The detail of distracted driving claims cost component in the rates is likely produced by modeling the price with claim type details.

          • May 2, 2018 at 3:28 pm
            Agent says:
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            Try writing a young male with violations, no credit and a sporty car sometime and you will find out all about high pricing. They usually end up with Progressive.

      • April 24, 2018 at 5:01 pm
        PolarBeaRepeal says:
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        I merely commented on the validity of the indications per the article. I’m not opposed to including the claims in the data used to price it NOW…. and adjust it each year, as the data matures. We agree on your point.

        • April 24, 2018 at 5:14 pm
          Rosenblatt says:
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          Fair enough

    • April 25, 2018 at 4:38 pm
      Agent says:
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      Polar, risky behavior is putting it mildly. The brainless cell addicts are going to pay a steep price if they don’t kill themselves and others first.

      • April 25, 2018 at 5:45 pm
        PolarBeaRepeal says:
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        Au contraire, mon ami! Most distracted drivers DO have a brain. The problem is their ability to ‘multi-task’ on talking/texting and driving when their primary focus is on texting or talking on their phone.

        • April 26, 2018 at 12:56 pm
          Captain Planet says:
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          Yogi,
          This is one for the history books. I agree with you!

    • April 30, 2018 at 11:19 am
      Anderson says:
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      As I was reading the brief I was immediately struck by the points you raise. Mostly, these points are ignored – in particular, that experience related data has to support the pricing (which is regulated).

  • April 24, 2018 at 5:46 pm
    sal says:
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    I’ve joined the “Agent” Club on the texting while driving. I sit in traffic every evening and it’s amazing how many people are glued to their phones. I just don’t get it…The iOS system for iPhone has a setting that puts your phone in a “do not disturb” setting once it connects to your bluetooth. You can receive calls, but can’t make them while you’re driving. You also won’t receive any text alerts and can’t text unless you manually override it. .

    • April 24, 2018 at 6:38 pm
      Rosenblatt says:
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      Asking since I have an Android phone and can’t check out that setting — does it also disable 3G/4G data or, even though you can’t text or make a call, you could (in theory) still open a web browser and access the internet or use a non-texting app that relies on a data connection?

      • April 24, 2018 at 7:00 pm
        Agent says:
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        Don’t play with the phone or settings and you won’t get caught. Every police report should make note of cause of accident and if it turns out to be distracted driving by cell use, put it in the system and let the companies charge for it. At fault accident plus distracted driving. They should pay a much higher rate for being brain dead cell users/texters.

        • April 24, 2018 at 7:38 pm
          Rosenblatt says:
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          Excellent points Agent. I totally agree. Do you happen to know the answer to the question in my post to which you replied?

          • April 24, 2018 at 8:10 pm
            Agent says:
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            Do your own research. I don’t fool around with my cell or seek ways around getting caught. As Jordan Spieth says, put it in the glove box while you are driving. That is a simple, but effective way to not get caught using, texting or any other use of the cell. Does that make too much sense for you?

      • April 24, 2018 at 7:48 pm
        sal says:
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        no clue, Rose…I’m about as technologically savvy as a caveman. I think it basically has the same effect as putting your phone on “airplane mode”, though you can still RECEIVE calls if you want, and I think you can make them hands-free if necessary. There’s even an option for it to send an automatic message (or voicemail, if you don’t want to receive calls) stating that you’re currently driving but you’ll respond when you get to your destination.

        Check out settings on your phone; i’m sure there’s something similar for Android.

        • April 24, 2018 at 8:22 pm
          Rosenblatt says:
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          Thank you for your informative reply, Sal. While I know Android’s “do not disturb” mode keeps data on (it simply “mutes” incoming notifications), it clearly works much differently than Apple’s in that it doesn’t automatically turn on when connected to Bluetooth. I appreciate your helpful response and teaching me something new.

          • April 25, 2018 at 4:36 pm
            Agent says:
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            Common sense goes a long way. You should try it sometime.

          • April 25, 2018 at 5:54 pm
            Sal says:
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            Agent–cut Rosenblatt some slack, will ya? the guy is not your enemy just because you both disagree on a number of topics, nor are you mine for the same reason. Would you honestly treat him like that in person?

            as you’re so fond of saying, “common, man!”

          • April 26, 2018 at 11:37 am
            Captain Planet says:
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            Hey Agent,
            How about some couth and respect out of you? Shape up or ship out!

  • April 24, 2018 at 9:40 pm
    Hector Projector says:
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    Many auto insurers use the point counts assigned by the DMV as the basis for the rating factors used for driving record. A quick way to increase rates for smart phone distracted driving would be for the DMVs be consider it a major instead of a minor violation. Then most companies would get an automatic rate increase for those violations. Hear that, state regulators?

    • April 25, 2018 at 5:50 pm
      PolarBeaRepeal says:
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      Regulators? Try legislators, not regulators.



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