April is Distracted Driving Awareness Month in the US

I have posted articles on the very real issues arising from drivers being distracted on their phones while driving. As such a headline which read 3 Ways the Insurance Industry Can Kick Distracted Driving to the Curb, caught my eye.

Having read the article by  assistant editor, Will Jones, of IA’s (Independent Agent) on-line magazine, I thought it had some excellent points and had equal relevance to our part of the world.

As such I reproduce Mr Jones article here:

3 Ways the Insurance Industry Can Kick Distracted Driving to the Curb

Driver distraction is a leading cause of vehicle accidents. Nearly 80% of vehicle crashes involve driver inattention, according to research conducted by the Virginia Tech Transportation Institute.

Eating and drinking, talking to a fellow passenger, applying makeup, programming a GPS or navigation system, or simply adjusting the radio all qualify as distracted driving. But using a cellphone while behind the wheel is undoubtedly the biggest cause.

According to a study conducted by Cambridge Metrics Telematics (CMT) last year, phone distraction occurred in 52% of trips that resulted in a crash—an unsurprising statistic considering that same study found that 75% of drivers see other drivers on their phones every day.

Joan Woodward, president of the Travelers Institute and executive vice president of public policy for Travelers, has observed a dramatic spike in fatalities on the road as a result of distracted driving in the last couple of years. “That got our attention,” she says.

According to the latest annual Travelers Risk Index, 40% of drivers polled admitted they have been involved in an accident or almost caused an accident because of their own distracted driving. “Those numbers are self-reported, of course,” Woodward says. “But people are saying that they’re doing this more and more.”

And the increase is making everyone nervous: 63% of drivers are more afraid of distracted drivers than drunk drivers, according to the CMT study.

Because of national education campaigns and law enforcement, drunk driving is both socially stigmatized and punishable with hefty fines, disqualification and imprisonment. In 2018, however, the same cannot be said about distracted driving.

According to Sam Madden, chief scientist, CMT, there is no doubt about the source of the first rise in road fatalities the insurance industry has noticed in a long time. “We see alcohol-related deaths are down, the educational campaigns around alcohol are working, and yet the number of fatalities is going up for the first time,” he says. “We certainly believe that’s a result of distracted driving.”

Penalties for distracted driving vary by state. Most levy fines under $400, while five states do not have any laws against it at all. And if law enforcement isn’t going to put the brakes on distracted driving, “the insurance industry really should be at the forefront of raising this as an issue,” Woodward says.

April is Distracted Driving Awareness Month, which makes now an ideal time to bring up the issue in conversation with your clients. Here are three ways that the insurance industry can kick distracted driving to the curb:

Education. Few drivers are aware that texting while driving at 55 mph is the equivalent of driving the length of a football field with your eyes closed. In an effort to change people’s attitudes about the dangers of distracted driving, the Travelers Institute® Every Second Matters initiative provides statistics, conversations starters and quizzes that insurance professionals can share with their clients.

“Our campaign is focused on the social norm—to change people’s awareness and to say that this really is not OK,” says Woodward. “It’s just not OK to text your way all the way to work or always be on the phone while you’re in the car.”

“This is not a problem that is just going to go away on its own,” Madden agrees. “As a society, we just have to accept that it is not OK for thousands of young people to die every year because of smartphones. We have to make people aware of it.”

Technology. Paradoxically, on the same device that facilitates most distracted driving, apps are becoming available that help drivers educate themselves about the amount of time they spend distracted when they’re behind the wheel—data which insurers can also incorporate into rating tools.

CMT’s DriveWell app does exactly that. “When you put this app in peoples’ hands, it makes them realize that they actually are engaging in distracted driving,” Madden says. “Results show that within a couple weeks, people reduce distracted driving behavior by 30% or more on average.”

“We have many small independent agencies that are offering a smartphone telematics program through us that is branded through their agency,” Madden adds. “It’s not always about moralizing with your customer—it’s about saying, ‘Did you know that if you’re a good driver, you can actually save money on your insurance?’”

Employers. One of the most common reasons drivers use their cellphones while driving is due to work. According to Travelers, 43% of employed American adults who drive admit to making work-related communications such as emails and calls while driving. And 27% say their boss has called or texted them even though they knew they were driving.

In a survey of Travelers’ customers, only 27% of commercial clients reported having a formal policy on distracted driving that was strictly enforced.

“We’re urging all our commercial lines clients to have a very strict policy in place for their employees about distracted driving—not only to have it, but to put it into practice,” Woodward says. “That’s really the key to curbing some of these commercial auto losses.”

Will Jones is IA assistant editor.

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Self driving cars ARE the future.

As has been reported in the news today, Uber has suspended its self driving car testing after a pedestrian was hit and killed in the state of Arizona, United States.

I said in a 2016 blog and I still maintain that, there is no doubt there will be accidents and deaths as the technology is developed, but there is already clear evidence that self driving cars are becoming more and more safe and if you consider the number of miles that have already been driven by self driving vehicles and the fact that, to my knowledge, only two people have died during this entire period, I do hope that lessons will be learned from this tragic death, but the development will continue for the greater good of us all. 

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What legacy are we leaving for the next generation

At least once a week, sometimes more than once a day, I am referred a matter where clients aren’t being given the right advice or being unfairly messed around during a claim. I know that many brokers and retired insurance professionals are helping with the same.

I thought I would share a note I received from an old mate showing how wide spread this is:

Hi Al,

Retired I may be, but immune from insurance related questions I am not.

I’ve had three thrown my way in the last few weeks, all related to Private Motor.

First one relates to the claim process at [name withheld] Insurance. (name of parent withheld).

My bike mechanic had a T/L [total loss] a few weeks ago and was telling me about it last night.

When he rang to make the claim he was instructed to obtain a driver record from Transport QLD for he and his wife. (She was driving at the time of the accident). I understand of course that the insurer has the right to satisfy itself about these matters, but I have never heard of this before. (Client and Mrs are in their 50’s so not a high risk profile). [As we understand it there was nothing to prompt this but it is standard procedure on all such claims].

FWIIW [For what it is worth], the rest of the claims process was just crap. Apart from its being drawn out, they were told the payout would be X but then that was revised by about 10% (downwards, naturally) without explanation or apology. Then when the settlement was agreed, they were told it would take another 7 to 10 days for the EFT to hit their account. Another person disgruntled with the industry. [At no time was the client offered any complaints procedure].

The other two queries, remarkably enough, were about cover for vehicles in transit.

One was my son in law moving from Townsville to Darwin and the other was someone in Perth, moving to Mt. Gambier.

Both rang to ask me for an insurer that would cover the transit risk (by truck and train respectively) as their comprehensive insurers had told them their policies don’t cover transit, even though one of them has a General Average provision in their wording.

One was [name withheld] through [name withheld] Leasing and other was [name withheld] through [name withheld]. In both cases, I told them to ask whoever they were talking to to show them where it’s excluded in their policy (after I had read them and could not find any such exclusion).

Admittedly, in both cases, they were dealing with AR’s of the insurer rather than the underwriter, but it still took some convincing to extract an admission that they were covered. In fact, [name withheld] maintained for a while that although the transit would be covered, the loading and unloading wouldn’t be. (I finally got this sorted as well).

I find it quite distressing that there appears to be such a lamentable lack of product knowledge on the part of staff [remember this is a basic high volume product]. What happens when punters don’t have someone to ask? Both of these people would have just bought cover they didn’t need.

I am more convinced than ever that the prime focus with regard to training is around compliance rather than product.

I’m not sure if any of this is any use to you but you’re in a better position than most to ventilate these sorts of issues.

Thanks for listening,

Peter [surname and email provided]


 

Like many in the industry, I share Peter’s concerns. This thing called ‘insurance’ seems to be forgotten and many Insureds feel like they move from being a customer to a criminal when they have a claim and then to a cost center when they prove they are not a criminal and simply want the protection they paid for.

With the two Insureds that had received wrong advice on their motor policy, what do they think of not only their insurer but insurance as a brand. What trust has been developed in these interactions.  Will they stay with the insurers knowing that if it is this hard and they are wrongly treated before a claim what can they expect should they need to make a claim.

As the world moves more and more to the experience of customers, many insurers and the agents, assessors, builders etc they use are doing their best to destroy trust and relationships.

Thankfully there are still people like Peter out their doing his best to project our profession /industry image and give people meaningful advice. He wishes he was involved earlier in the claim situation.

Just thinking about this, if this chap is mentioning this to Peter and before the conversation as I understand it, he did not know Peter had been in insurance, how many others is he complaining about his experience to. How much of the TV ads are wasted as a result for as we know we trust people we know more than TV and big corporations.

Is it any wonder that Lemonade and others who are focusing on the customer experience are getting so much attention.

While this is a treat, it also creates opportunities for brokers, claims preparers, lawyers and others who are there to provide meaningful advice either before or after the loss.

Of course this sort of behavior only leads to more regulation (clearly needed in some areas) and opens the door for genuine disruptors.

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Do not even think about it

Odessa Ukraine – September 20 2016: Driving cars on a flooded road during flooding caused by torrential rains. Cars float on water flooded streets. The disaster in Odessa September 20 2016.

The number of drivers that are risking their lives, the lives of others, including emergency service personnel, and their vehicles by driving into flooded roads is of increasing concern.

Some insurers have in fact started to include an exclusion in their policy refusing to indemnify for such losses which can be substantial.

I support this in an effort to have people understand the personal risk they are taking but struggle where someone does it by accident, say driving along an unfamiliar remote country road at night.

You can check who has introduced this exclusion by visiting LMI PolicyComparison.com.

Whether you are insured or not for this risk, my strong advice is do not even think about driving across any flooded roadway.

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Phones and driving do not mix

Over the past month, 3 relatives and friends have been involved in motor vehicle accidents where at least one of the drivers has admitted to texting or doing emails while driving.

As well, there was the tragic accident involving two police officers who were severely injured whilst setting up a random breath testing station in Sydney. Another case in the last month where the driver admitted to being distracted by their phone.

This is a serious problem that is confronting society and the insurance industry and I support the decision by more and more underwriters to include an exclusion in their policy, giving them the ability to deny liability in the event that the insured driver was texting whilst driving and the accident occurred.

Clearly the police alone cannot address this situation, which to my mind, is only becoming worse.

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When is it time to stop pretending to care about customers and actually start?

I reported on two claims recently which were completely and utterly off the rails. The first being a home where this would be the 4th Christmas the Insured would be out of their home despite having their insurers top of the range product. It was a bush fire situation and there was no suspicion of arson, it was just a case of the panel beater builders completely letting the Insured down. After 15 months of trying, we finally got a common-sense solution, but it has now been 6 weeks that the release has been stuck in legal. How to draft a release was one of the first things I learnt as a claims officer when I was 17 years old and I cannot understand how a claim that has been so terrible handled is dragged on so that it cannot be resolved before Christmas number 4.

I was equally dismayed this morning to see a comment in The Age (21st December 2017) where an Insured has said

“The insurance companies are hopeless I won’t use them, I’ll just try and sell these”

This is a response to the recent hail storm we had in Melbourne.

It is comments like these and the negative feedback from the Insured in the claims that I wrote about recently, which they are saying to their friends and relatives, which caused the great doubt of trust in our industry. An industry which has as its core principles, Utmost Good Faith.

If we don’t address this situation we will suffer as an industry in the long term.

Source: The Age Newspaper, Melbourne, 21 December 2017

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Another lesson learned from the US when it comes to motor

Like many things in the United States, and particularly when it comes to insurance there a lot of differences. I am looking at motor insurance.

No matter how old you are and/or your level of driving experience you may have in another country, if you are an expat or new resident, it counts for nothing and you start from scratch as if you are a new driver.

In my case, my daughter has been living in Chicago for 5 years studying for her doctorate. Living in the ‘loop’ (central business district) in this city with loads of public transport there was no need to have a car. To complete the degree she has to do a one year residency and she selected Phoenix Arizona as her number 1 choice and got it. Phoenix is like LA in that you need a car to get around. The cost of insurance however, due to the penalty for not having US driving experience is cost prohibitive. She worked out she could catch an Uber to and from work every day and getting groceries etc delivered it would be less than the cost of insurance let alone petrol (gas) depreciation and having the hassle of selling the car when she returns to Australia.

Had she got a US licence when she first went there and had a 5 year clean driving and accident record it would have been around 1/3rd the cost and she may well have got the car for the convenience sake.

The other issue that she discovered was like home insurance, the basic liability coverage limits are ridiculously inadequate. The standard is $15,000 for bodily injury under a comprehensive motor insurance policy. You do not have anything with your registration. If you consider the really high cost of hospital and medical treatment it shows how inadequate such a limit is.

Similar standard low limits apply for third party property damage. I would hate to have the $15,000 limit and cause a semi trailer to overturn.

Yes, you can buy more but to get it to even a $1 million coverage significantly adds to the cost.

When compared to our level of coverage, we are way better off in Australia and New Zealand.

 

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2 words of warning regarding motor vehicle claims

On one of the television channels special report shows they had a segment last week criticising the insurance industry, including a broker, over damage to a vehicle that had been insured for only third party property damage.

This form of cover is risky in itself as there is no cover for damage to the vehicle when the driver themselves is at fault and/or if it is damaged whilst parked and the person that hit the vehicle does not leave an honest note. Further, there is no cover for weather perils or if the car catches fire or is stolen.

Having said this there are fire, theft and third party property damage covers available, but they are still not as good as comprehensive.

I do not know the circumstances of the matter and cannot comment as to why the other vehicles insurer is not coming to the party. There may be an exclusion such as drink driving, unregistered vehicle, or the vehicle may have been un-roadworthy. it is possible that the insurance may have expired. These are all risks you take when you do not have full comprehensive insurance.

In addition, to remind people of this issue I also want to again warn that there are a lot of unscrupulous firms preying on unsuspecting people. They typically focus on people in the lower socioeconomic community. This group of course can least afford to be caught up in the scam financially and often do not have the training or experience to know how to fight the fraud.

What we have seen is such a person, end up with a repair bill of say $10,000, plus a hire car bill of over $25,000, kindly provided by the scammer, when the damaged car has a net value after salvage of say $5,000.

This is becoming a major problem in Australia, along with staged accidents and dodgy repairs. It was great to see arrests reported a little while back on fake injury claims and I know the insurance industry is throwing a lot of resources on building the case against many others as well.

The sooner the better as it sickens that any one is caught by scammers but particularly those who are already victims and can least afford it.

Any journalists out there please be careful of the companies you inadvertently promote in your programs and please go back after a few months and ensure that the whole thing has had a good ending for the innocent party.

 

 

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What happens when the V8 super cars knock on your door?

Dear Prof. Manning,

I find myself in a difficult situation and have not been able to get any clear guidance, except to contact you. I’ll try and keep it short mainly because I am now thoroughly confused and overwhelmed.

We live in Newcastle, our home is an 1890’s Terrace listed on the State Heritage Register.

We have the V8 Supercar Race touted to be heading up our Street. The track will be 3 meters from our home.  This has never been done before and all the National and International Standards have based their health and safety recommendations on a distance of 30 meters from the track, not 3 meters. I have not been able to get clear information of how Supercars will “adapt” the depth and type of safety barriers, to protect our home, given we are so close to the track.

Supercars and Destination NSW have told us very little except there will be no compensation and that any insurance will be up to us, individually. Council just don’t answer emails.

I’ve spoken to our Home insurer (NRMA) who said our policy still stands but that damage to our home will be done on a “case by case” basis as they have nothing to compare it to. They can’t put anything in writing and they won’t guarantee that damage will be assessed in favour of cover. They then referred me to The Insurance Council, who straight away, sent me on to a phone number for National Insurance Broker register, who then sent me onto The Markey Group in Newcastle, who then gave me advice to speak with LMI Group.

So far, no one can give me any guidance on protection for my Home or the people in it, during construction of the race track which will be extensive or during the days of the race every year. I have not been able to get any quotes, no guarantee’s and very little constructive advice because as they all said, they have nothing to base their advice or cost on and no one is sure who to send out to us, to do a quote. Therefore, who would they send to give us a loss assessment if there is damage and then what would they base that assessment decision on, if this situation has no comparison? Will this car race situation increase the cost of our insurance policies in the future? No answers to these questions either.

Would you have any advice? If we are to pay for an assessor I’d like to know they were the right person to ask. There are many others in our situation.

Kind regards

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Insurance – Unfairly vilified

The media, instilling the incorrect message into the heads of the public.

This week on FM Radio, Triple M, the insurance industry was once again vilified, this time by the hosts of breakfast radio.

The background of the matter was that one of the journalists was hit in the rear while driving across the Bolte bridge, and as a result of the hit, was pushed into the vehicle in front of him. The vehicle that caused the accident, failed to stop and the police nor City-link would assist with providing the registration number of the vehicle that caused the accident.

The insurer, in this case GIO, were criticised because they required the insured to pay the policy excess.

The reality is, a policy excess means that the insured is responsible to pay the first amount as shown on the schedule for any claim under the policy. The size of the excess is reflected in the premium charged on the policy. To make it easier for clients and as a value add, many insurers including GIO, have been waiving the Insured’s need to pay the excess where a third party who was 100% responsible is identified. This probably saves them the hassle of collecting the excess and then refunding it. But for whatever reason, it is to the Insured’s benefit that this process takes place.

Where this is not possible, then in the first instance the Insured is required and should, based on the price paid for the product, pay the excess. If during the recovery process the insurer is able to identify the vehicle and a successfully recovery is able to be retained from the third party, then the excess will be refunded.

As the excess is by definition the first part of any claim, it is only reimbursed when the balance of the claim has been paid to the insurer.

Rather than demonising the insurance industry for the approach taken in this case, all the people who are not required to pay the excess when they can provide the registration number and details of the responsible party, should be appreciative of the no-fault excess process.

With more and more people thinking it is acceptable to hit and run and an increase in road rage, coupled with a continued drop in price, my recommendation is to get a front and rear dash cam fitted to your vehicle and then this whole matter would be avoided.

The last point I would make is that whilst I was not present, I cannot understand with modern seat belts how the journalists chin hit the steering wheel if driving the vehicle correctly.

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