I read a recent article in the May 2017 issue of the National Underwriter. It was interesting that while technology is transforming our lives more and more - it is also impacting the vehicles we are driving as well.
Fancy dash boards that resemble jet fighter plane cockpits, self driving cars are just a part of the trends. Don't forget about our portable devices.
Would you even dream of buying a car today if it didn't have blue tooth, or built-in WIFI, or access to your Pandora account, let alone NetFlix for the heads up screens. Don't forget to put in a charging station for my cell phone, tablet or lap top. The heck with mpg, or color of the vehicle, towing capabilities - that type of stuff is very old fashion. Give us the technology - and lots of it.
Well the interesting statistic is that while the number of auto accidents are not going up. In fact, it is in proportion to the increase in number of vehicles on the road. What is going up is the severity of the claims - or the dollars being spent out - because the claims are not cheap.
From the article - the last year the insurance industry collected more premiums vs paid out dollars in claims was 2007. That's right, over 10 years ago. Can you run a business if your expenses continue to outpace the revenue you charge for your service.....for 10 years in a row?
From 2014-16 the data reveals an alarm increase in severity on type of auto losses:
The more alarming statistic in the article - the costs to settle claims, or what increases are impacting insurance. Hospital bills, auto repair parts and labor, attorney fees, etc. Remember that for the same time period, the consumer prices overall rose only 1.7%.
What does all this mean?
The auto insurance industry is forecasting more and more sever claims as we are more and more distracted while we are driving. Tapping the car in front of you at the light used to be that you were only going 5-10 mph, and minor damage with no bodily injury. Now, because we are more and more distracted behind the wheel - we are no longer "tapping" the car in front of us - we are hitting them at 40 mph, and people are getting hurt....badly.
We should NOT be surprised that until there is a way to shut off the technology to keep us focused on the road, auto insurance rates will begin to increase at dramatic rates.