Investment Guru Blames Texting and Driving on Skyrocketing Insurance Premiums
We know texting and driving is dangerous and expensive, but a letter released by Warren Buffet highlights the massive costs to insurance companies — and to you, the insured making payments each month.
Warren Buffet is the CEO of Berkshire Hathaway, parent corporation of GEICO Insurance Company, which together with its subsidiaries pulls in a whopping $1.3 billion a year in the eye-popping $16 billion a year Texas market each year.
In his annual report to his company’s shareholders, the Oracle of Omaha named the reason national profits at his insurance company had shrunk from $1.16 billion in 2014 to only $460 million last year.
What could cause this? Bad weather? An increase in DWIs? No, too many distracted drivers.
The National Safety Council just revealed that the U. S. experienced an alarming eight percent increase in traffic fatalities from 2014 to 2015. This is the largest year-to-year increase in 50 years.
I’m not suggesting you pull out a violin to mourn the lower profits of this corporate giant. But Buffet’s observation will have a huge impact on all of us.
First, the insurance world is finally figuring out that it has a major problem on its hands. Allstate’s profits declined by 50% last year.
Second, we all know that our insurance companies will pass on their increased costs of paying claims and verdicts to us policyholders.
So easy to fix this problem, a caveman can do it
In addition to the enormous injuries and their often devastating costs, drivers will face steep increases in premiums. After all, the insurance company is a business that will find ways to make money for its investors. The simplest and most common way to correct losses is to raise rates to consumers.
The problem is frustratingly fixable. Even the GEICO caveman can figure out that texting while driving increases risks of an accident and he or she needs to put down their cell phone.
But there might be good news due to this
The good news is that numerous Texas municipalities and states across the country have banned texting while driving. Unfortunately Texas lawmakers have not reached that level yet because of the misguided notion that it is a matter of personal freedom, rather than a public health issue. It’s ironic that requiring seat belt use doesn’t infringe on freedom, but allowing a deadly practice that causes people to crash into each other does.
If the increases in accidents, loss of life and severe injuries don’t prompt Texas lawmakers to act, maybe the financial costs will convince them.
Berenson Injury Law believes that there should be a statewide texting while driving ban. Texas drivers deserve rules that protect us from distracted drivers.