Texting While Driving, New Laws

Sure, for some people it is tempting when they see a text message come through on their cell phone while they are driving, to respond right away. Waiting 5 minutes or more to let Sara know that you are free to go out Friday night or letting your spouse know that chicken sounds great for dinner, is seemingly too much to ask. However, a recent study released by the Virginia Tech Transportation Institute showed that long haul truckers that text while driving were 23 times more likely to be involved in an accident than their non-texting counterparts. This is compared to drivers being 6 times more likely to cause an accident if dialing on a cell phone than not. I think they would find that number even higher if they were to do a study of every day drivers in suburban traffic, where drivers have to deal with more stop and go, red lights, cars slowing to turn, etc…

What is surprising is that 36 States have not already banned this type of activity, including Arizona. In fact, the Arizona Senate voted against a bill to ban texting while driving in June 2009. Although, the Phoenix City Council did ban texting almost 2 years ago, within their jurisdiction.

There is now Federal legislation being discussed to try to enforce a texting ban in all States. While it would be up to the States to individually implement the bans, the Federal Government would make it difficult to ignore, by withholding 25% of Annual Federal Highway funding within the State if they choose not to comply within the timeline established. The legislation is being directed specifically at texting while the vehicle is in motion, not for stopped vehicles.

Personally, in the last month, I have had a vehicle run a stop sign in front of me, had a child on a bicycle swerve towards my car, and had a driver make a left hand turn across my lane as I entered the intersection with the right of way. Each of these incidents required a quick reaction on my part to avoid a collision. You can imagine that if I had been looking down at my phone trying to text, the outcome would have been very different.

Even if you believe yourself to be driving safely, remember that you have absolutely no control how other drivers are operating their vehicles.

www.bigboytoyinsurance.com

Health Insurance, Adverse Selection

Americans have gotten spoiled over the past 50 years with the use and function of health insurance. In the 50's, Ford, General Motors, IBM, Coca Cola, US Steel and other large firms began offering health insurance and other insurances as benefits of employment with the respective firm. It became a one-up-manship within industries in order to attract and keep talented, qualified employees. As Americans, we came to expect health insurance as something you have through your employer and the employer took care of the premium. We had/have no idea of how much health insurance truly cost because we were not paying for it. Companies would richen the plan through low deductibles, low co payments and large provider networks in order to make "us" happy. It was not until we were laid off, terminated or quit our employer did we realize the true cost of health insurance. That alone was enough to get a resume out to any company that had was hiring.

Group health insurance plans are more expensive than individual plans due to one important factor-guaranteed issue. Group plans offer health coverage to all eligible employees regardless of current health or pre-existing conditions. If you had a heart attack last week and just started your new job this week, the health insurance has to accept you through the employers group health insurance policy and pay for the heart attack treatment. That increases the cost to the plan when it comes time for the insurance company to review the past years claims. If you had the heart attack before starting the new job, the health insurance company cannot decline coverage to you.

Individual policies, non employer sponsored plans, are not guaranteed issue because of Adverse Selection. If you were diagnosed with cancer today, had no coverage in place, then applied for insurance, you would be declined. Same as if you had no car insurance today, hit another car then went to an insurance agency to apply for car insurance requesting to have the insurance company pay for the damages you caused earlier. Insurance has to be in place at the time of the loss for the insurance to cover the loss. Insurance 101.

Insurance is important to our American way of life. It offers protection against the things we do not expect. However, it seems health insurance has become a naturalized right of all Americans. Unfortunately, it is not a right but rather a mechanism for protecting our assets from total or partial loss which we are responsible for paying on our own.

www.bigboytoyinsurance.com

Progressive Insurance, Behavior Insurance

Progressive Insurance is introducing a new means of tracking their customers driving habits by having customers voluntarily install a device in their car(s) that track several driving characteristics such as braking frequency, braking severity, actual mileage and actual times in order to pinpoint rating models. The pilot program is being launched in Texas next month and they are offering an initial 10% rate discount to the first "trial" customers.

The intent of Progressive Insurance's new driver tracking device is to make insurance individualistic. By tracking customers driving habits to the exact degree, they can tailor rates to that specific customer without having to rely on the customers responses to underwriting questions or expensive databases.

Progressive will also use the information to predict frequency and severity of accidents in order to assist in reducing claims expenses. Insurance companies make money through two primary means: premiums and investments. Insurance companies spend money through two primary means: operating expenses (payroll, fixed expenses, supplies, etc.) and claims. If an insurance company can reduce claims expenses without raising rates, it increases profits without compromising market share. This is the ultimate goal of Progressive's new tracking devise.

We'll see how effective their new "gadget" will influence the rest of the private auto insurance market over the next 12 months. If they are able to increase profits without raising rates and other insurance companies take notice, then Progressive can call it a success.

http://www.bigboytoyinsurance.com/