Insurance Rates Rising Due to Distracted Driving

Warren Bufffet, whose Berkshire Hathaway Inc. owns Geico, the second-largest auto insurer in the U.S. has a made an impactful statement for all auto insurance policyholders, your rates are going up!

In an interview with CNBC, Mr. Buffett noted that the ratio of deaths per driven mile from auto accidents up until September 2015 have increased, resulting in a decrease in profits because of more traffic accidents and more severe accidents. According to Mr. Buffett, vehicles are much safer today than ever, so distracted driving must be the reason for the increase in traffic crashes and fatalities.

Mr. Buffett explained that the rates for insurance will increase in the next six months because of the increased frequency of collisions, and the cost of crashes has risen. Most insurance clients will see the new rates come into effect at the time of renewal.

Warren Buffett Recognizes Distracted Driving Is a Problem

AAA just released a study that determined seventy percent of its respondents admitted to talking on a cell phone while driving. In the same survey, forty-two of the respondents admitted to reading a text while driving while Thirty-two percent of the interviewees admitted to typing and sending a text while driving.

Geico is not the only insurance company who will be raising insurance rates. Allstate in the U.S. recently reported that their profits were down by fifty percent. Distracted driving and its financial consequences will affect all drivers in the long run. Unfortunately, insurance companies have no choice but to increase their rates. As drivers. we do have a choice, and that is not to drive distracted! It’s that simple.