AAA Says Bad Driving Worsened Last Year
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Drivers increasingly engaged in dangerous behaviors last year. According to new survey data from the AAA Foundation for Traffic Safety, this put the brakes on a three-year decline in speeding, driving under the influence, and texting while driving.
The foundation found widespread increases in bad driving habits in 2021, but “most alarming” was a nearly 24% year-over-year uptick in the number of people who admitted to getting behind the wheel after drinking too much. A total of 7.3% of those surveyed admitted to driving under the influence of alcohol.
Those admitting to excessively speeding increased by 12.4% to nearly 51%, and those who said they drove within an hour of consuming cannabis rose by 13.6% to 5% of all people surveyed.
“The reversal in the frequency of U.S. drivers engaging in risky driving behavior is disturbing,” David Yang, the foundation’s executive director, said in a statement. “While drivers acknowledge that certain activities behind the wheel – like speeding and driving impaired, are not safe, many still engage in these activities anyway. We must be aware of the serious consequences of dangerous driving behaviors and change course.”
More than a quarter of those surveyed admitted to texting while driving in the past 30 days, even though 92% acknowledged doing so is dangerous. And while 88% of people agreed that aggressive driving behaviors, such as quickly changing lanes, is hazardous, nearly 23% admitted to driving aggressively within the past 30 days.
Insurance industry observers have noted the especially poor performance of personal auto lines of late is partly due to unsafe driving. Driving behavior worsened with the onset of the pandemic, coinciding with a decrease in overall miles traveled, and has not improved as traffic volumes normalized. Other factors cutting into personal auto profitability include supply chain disruptions, increasing costs of vehicles and replacement parts, and a shortage of skilled mechanics.
- Published in Blog
Electric Vehicles Present New Insurance Challenges
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Electric vehicles (EVs) continue to gain traction in the U.S. auto market. Last year, Americans bought nearly 450,000 EVs—an 83% jump over 2020. With many federal and state governments pushing for lower CO2 roadway emissions, EV demand is expected to soar during the next decade.
This has commercial fleet owners wondering what a world without gas- and diesel-powered vehicles might look like, particularly when it comes to the potential exposures EVs could create. This article discusses the risks that could impact insurance costs for EV fleets.
Unique EV Risks
Because EVs tend to cost more than standard automobiles, their insurance rates are usually higher. However, other factors unique to EVs could also make insuring them costlier. Such factors include:
- Cyberthreats—Like most new cars and trucks, EVs offer connected car technologies such as Wi-Fi, data sharing and semi-autonomous systems that leave them vulnerable to cyberthreats. However, the public charging stations EVs rely on to recharge their batteries add another layer of risk. Charging stations may serve as an entry point for malware attacks, data theft, system outages, bugs and glitches. What’s more, once a data breach occurs in a single vehicle, it may be easier for a malicious party to access the rest of the fleet.
- Battery problems—There are several risks associated with EV batteries that can potentially impact commercial fleets. For example, battery manufacturing defects can lead to large-scale vehicle recalls, putting fleet owners at an increased risk of business delays. Additionally, under certain conditions, lithium-ion batteries that power EVs can ignite or explode. Notably, battery fires burn longer and hotter, release more toxic fumes and liquids, and spread faster over a larger area than traditional fires. Such an incident would create a whole new set of insurance challenges.
- Pedestrian accidents—One selling point of EVs is they run quieter than gasoline-powered vehicles. Unfortunately, this lack of audible engine noise may also put pedestrians at greater risk of being hit if they fail to hear an approaching EV.
Other Considerations
While uncertainty about new EV technologies will likely drive up insurance premiums initially, expectations are that prices will stabilize over the long term. Meanwhile, several other concerns will need to be addressed before EVs become scalable. These include the following:
- Scarcity of repair shops and parts—Very few auto shops can handle EV repairs, so it may be difficult to find timely service. Further, shops that do fix EVs often have trouble locating parts. This is partly because four key elements essential to battery technology—cobalt, graphite, nickel and lithium—are currently in short supply. Even if supplies can eventually catch up with surging demand, EV auto shops will remain at risk for supply-chain delays, as these rare elements are sourced from distant regions all over the globe.
- Costlier repairs—Most EV parts cost significantly more than parts for gas-powered vehicles. Batteries are especially high-priced and vulnerable to harm. An accident that might be a fender-bender on a standard car could result in an EV’s total loss if the battery takes serious damage. Adding to costs, EV repairs usually require more labor hours. This is in part due to EV technology’s increased complexity as well as auto mechanics dealing with the learning curve of working on unfamiliar machinery. As a new generation of technicians gains experience, repair times should shorten.
- Extreme weather concerns—It’s unclear how much of a role extreme weather will play in EV battery performance. Under severely hot temperatures, batteries, on rare occasions, have been known to ignite or explode. Under cold temperatures, batteries hold their charges for a shorter period of time. However, it’s unknown whether these drawbacks are significant enough to make EVs impractical in certain weather conditions or climates.
- High voltage hazard—A number of high-voltage electric cables run throughout the body of EVs. When an accident occurs, exposed cables could cause serious injury to passengers or first responders trying to free crash victims from damaged vehicles.
Conclusion
Although it probably won’t happen overnight, EVs seem positioned to dominate roadways sometime in the near future. Commercial fleet owners who start thinking about EV insurance challenges today will be better positioned to thrive in a post-fossil-fuel landscape.
Contact us today to learn more about insurance for EVs.
- Published in Blog
These Three Trends Could Have Big Implications for Workers’ Compensation
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Legislation surrounding the gig economy, single-payer health insurance and marijuana legalization all have the potential to impact the U.S. workers’ compensation system, according to a National Council on Compensation Insurance (NCCI) report.
Digital platforms such as Uber ushered in a modern gig economy and renewed public discourse on worker classification. Proposals in numerous states would provide criteria for determining whether a worker in the gig economy should be classified as an employee or an independent contractor. For instance, California has a three-part test to determine the status of a worker; lawmakers in Rhode Island and Vermont have considered similar tests. Other states, including Alabama, South Dakota and Washington, have focused on workers using digital platforms.
The NCCI noted that proposals making it more likely for a worker to be classified as an employee would generally benefit an injured worker in the event of a workplace accident. “On the other hand, proposals that would make it more likely for a worker to be considered an independent contractor may reduce costs for employers,” the organization said.
No state has fully adopted a single-payer health insurance system, though several are studying the issue, according to the report. Most proposals that reference workers’ compensation would direct the board of new state single-payer programs to “develop a proposal for coverage of healthcare items and services covered under the workers’ compensation system.”
California, Kansas, New York and Rhode Island considered or are considering such proposals this year. Last year, Washington enacted legislation establishing a new commission to study universal health care, and Oregon extended the life of a previously created task force.
And while marijuana remains illegal at the federal level, numerous states took steps this year toward legalizing marijuana for medical or recreational use.
States are divided on whether to allow, require or prohibit medical marijuana reimbursement in workers’ compensation. State policymakers may need to consider adopting a fee schedule or another mechanism to address reimbursement, the NCCI said. The legalization of recreational marijuana “raises concerns about workplace safety, drug-free workplace issues, and drug testing issues, and may also challenge employers and insurers to provide reimbursement,” according to the report.
Federal legalization would mean insurers may no longer need to worry about conflicts between state and federal law.
“Claims could be reported, and appropriate data could be collected, which would assist in understanding the impact of the use of marijuana in treating workers’ compensation claims,” the NCCI noted. However, it would still be up to states to determine how to address workplace safety, reimbursement and other concerns.
For more articles on workers’ compensation topics, contact RISQ Consulting today.
- Published in Blog
