While young people between the ages of 16 and 25 have some of the highest auto insurance rates in the nation, they should expect even more expensive prices in the future. And it seems they only have themselves to blame.
The reason? Smartphones.
In a social media-addicted world of instant gratification, young people are accustomed to instantly accessing information with a few simple taps on their bright screens. According to auto insurance companies, many young drivers are unable to resist the temptation of checking their phones while behind the wheel.
Unfortunately, this deadly habit is one of the main culprits behind driving fatalities nationwide.
One of the nation’s largest auto insurers, State Farm Mutual Automobile Insurance Company, conducted a survey in 2015 to find out more about modern driving habits. What they found was shocking — 36% of drivers admitted to texting while driving, while 29% reported accessing the Internet while driving, too. These statistics were even worse among the Millennial set; of the demographic between 18 and 29 years of age, 64% texted while on the road and 54% used the Internet.
Additionally, the National Highway Traffic Safety Administration has reported that the amount of driver fatalities has increased since the emergence of smartphones — even though modern cars are safer than they have ever been. In 2015, driver deaths behind the wheel grew 7.2%.
According to State Farm’s data, 88% of survey respondents owned smartphones. This is a dramatic increase compared to 2011, when just 52% owned smartphones.
Considering these trends, it’s hardly surprising that auto insurance rates would increase. Simply put, smartphones are creating all types of problems on the roads. In fact, the Insurance Information Institute (III) reports that insurance premiums have increased steadily since 2009.
According to the III, the average auto insurance policy nationwide costs $831.58. This number grew 3.3% in 2014 alone, when average auto insurance rates hit their peak.
Currently, the most expensive state for auto insurance is New Jersey, with the average driver spending $1,263.67 per year to insure their vehicle. Oddly enough, the most expensive place for auto insurance was Motor City, also known as Detroit, Michigan, where drivers spend a whopping total of $10,723 to insure their cars every year. Comparatively, the state of Idaho was the least expensive state, with a cheaper total of $571.94. Winston-Salem, North Carolina was the cheapest city on record, with low average payments of just $969 annually.
In general, the typical auto insurance policy is good for one vehicle year, meaning 365 days of insurance coverage for a single vehicle.
The Wall Street Journal predicts that this trend will continue in 2017, despite the emergence of cars with new anti-collision technology. Unfortunately, because Americans are more attached to their cell phones than ever, distracted driving is likely to rise as well.
In fact, a few weeks ago, Michael LaRocco, chief executive of State Auto Financial Corporation, said that this phenomenon is “an epidemic issue for the country.”
For the younger generation, which is more attached to their cell phones than older drivers, this is especially bad luck. Because rates are often tied to the driver’s age, it may not be possible to shop around for cheaper coverage. While 48% of car buyers spend one to three months shopping before they make their purchase, most young drivers don’t have the luxury of looking around for the right insurance to fit their needs. It’s what Millennials might call reverse ageism.
Not only that, but DMV.org explains that from the get-go, young drivers often have problems establishing good relationships with auto insurance providers. Inexperienced drivers are subject to higher premium rates off the bat because they have a much higher crash and fatality rate. In fact, the rate of accident-related deaths per mile for 16 to 19-year-olds is three times higher compared to drivers over age 20.
Plus, the DMV believes that teens have a greater tendency to speed, tailgate on the road, and are less likely to wear their seatbelts behind the wheel. Unfortunately, teens often cannot recognize when they are in a dangerous situation on the road, such as when they are being distracted, either by their smartphones or friends in the backseat.
While teens have always been more accident prone, there’s no doubt that the usage of smartphones has only exacerbated this fact of life, causing a huge price hike for Millennials who are already pinching pennies.
So, Millennials, keep the smartphones far, far away while driving. Your bank account will thank you later.