Insurers Addressing Distracted Driving Through Policies

Distracted driving remains a potent issue for the insurance industry, with the potential to spell major trouble in terms of claims.

Allstate Corp. President Matthew Winter, for instance, recently remarked on how distracted driving helped fuel a spike in accident frequency beginning in 2015. "We know now that it was a combination of miles driven ... and also increased smartphone usage," he said at an industry conference held February 15, according to a transcript.

While acknowledging some skepticism on the part of others, who argue that cellphones have been around for some time, Winter countered that the key difference is the "smart" in smartphones. Smartphones, he said, have the potential to distract a driver much more than devices that allow the user only to talk. The Wall Street Journal also recently covered the topic, publishing a story February 21 entitled "Smartphone Addicts Behind the Wheel Drive Car Insurance Rates Higher."

Beyond rate actions, insurers are working some proactive countermeasures into their policies, based on a review of recent product filings. For this analysis, S&P Global Market Intelligence did a search on the term "distracted" in product filings published since January 1.

Recently published commercial auto

On the commercial side, National General Insurance Online Inc. offers a "Safe Mode Smartphone" discount, which applies to policies where the insured has a program in place to disable smartphones or tablets while the vehicle is in motion. Information on the discount can be found in a filing submitted to New York regulators in November 2016.

Several apps are available that seek to curb distracted driving, such as SafeDrive, Drivemode and FleetMode. One that appears to have gained some traction with insurers is Cellcontrol. On its website, the company lists partnerships with Allstate, Liberty Mutual Holding Co. Inc., Arbella Mutual Insurance Co. and Privilege Underwriters Reciprocal Exchange.

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The field of telematics seems to be closely related to these endeavors. For instance, to develop the smartphone version of its Snapshot program, Progressive Corp. partnered with TrueMotion Inc., a company whose stated mission is to end distracted driving. TrueMotion offers a free app, known as TrueMotion Family, that encourages safe driving by scoring a driver's habits during his or her trip. TrueMotion is working on another app, Mojo, that rewards safe driving, according to the company's website.

A product filing from one of MetLife Inc.'s subsidiaries mentions that distracted driving data might be incorporated into the insurer's telematics program. The My Journey app collects information on driving behavior that could include "distracted driving data and other aspects of your driving history," according to a filing submitted to New Jersey regulators by Metropolitan Property & Casualty Insurance Co. in January.

Recently published personal auto

Several personal auto filings in this survey discussed how driving violations will impact premiums and that one of those violations can be distracted driving. Forty-six states and Washington, D.C.; Puerto Rico; Guam; and the U.S. Virgin Islands ban text messaging for all drivers, according to, the official U.S. government website for distracted driving. The vast majority have primary enforcement, which means that an officer can issue a ticket without any other traffic violation taking place.

Another popular topic in recent product filings was how apps from transportation network companies such as Uber and Lyft might encourage distracted driving, since the users of these ridesharing apps are on their phones while driving to find riders. American Family Insurance Co., for instance, explained how increased distracted driving was one of the rationales for a 15% surcharge on its transportation network company gap coverage endorsement. Competitive information and the additional exposure from increased driving were also factors. This information can be found in a filing submitted to South Dakota regulators in February.

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Jan 27, 2017
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