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Distracted Millennials May Be Driving Up Insurance Rates

June 13, 2017
Auto Insurance, Insurance
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Distracted driving has gotten a lot of blame in recent years for helping push up car insurance prices. A new NerdWallet survey conducted by Harris Poll suggests that millennials (ages 18-34) in particular are prone to distracted driving, which could lead to more insurance claims and higher rates for everyone.

Here’s a look at millennials’ habits on the road, their attitudes about insurance and how they are having an impact on insurance rates for all drivers.

They’re the most distracted drivers on the road

Distracted driving is a problem among all age groups, with 62% of Americans who have driven in the past 12 months admitting to such activities as eating, putting on makeup, and caring for children in the back seat while behind the wheel, the survey found.

Although over half of those surveyed in every age group, except those 65 and older, admitted to engaging in a variety of distracting behaviors, millennials were the most likely (77%) to acknowledge doing one or more of them.

They’re most likely the ones weaving, crashing

Based on their level of distraction, it’s not surprising that millennials admit that cell phone use has hindered their driving. Among Americans who have used a cell phone while driving in the past year, millennials are more likely to say they had weaved in and out of a lane, almost went off the road, almost got into an accident and/or did get into an accident (18% compared with 13% overall), according to the survey.

A recent study of 16 years of data on 20 million U.S. adults by credit reporting agency TransUnion offers additional insight into the consequences of bad driving habits: People ages 22 to 37 are far more likely to have violations (27%) than those ages 38-52 (16%) and ages 53-71 (8%). For the study, violations included any incident that would end up on a motor vehicle record, such as speeding and running red lights.

“While the rate of tickets for distracted driving remain very low due to the difficulty in enforcing the laws, we do see that the frequency of violations is highest for millennials and has been increasing over time,” says Jeff Reynolds, TransUnion’s vice president of insurance product development.

They may be more to blame than others for car insurance rate increases

Insurance rates have been going up for all drivers. Auto insurers blame recent rate increases in part on higher repair costs and a rise in claims and accidents, especially those due to distracted driving.

“As the trend line for accident frequency continues to increase, consumers will be faced with a corresponding upward pressure on insurance rates,” says Robert Passmore, assistant vice president of personal lines policy for the Property Casualty Insurers Association of America, a trade group.

All age groups play a part in pushing up everyone’s car insurance rates because of car accidents and claims. But the Harris Poll survey data suggest that younger adults may play a bigger role in causing rates to rise more than other age groups.

They’re more willing to lie to save money

Millennials are more likely to have intentionally put incorrect information on their insurance applications (16% vs. 8% for all other age groups). These lies include giving low estimates on miles driven and not including everyone on the policy that could be driving the car.

But they’re less likely to compare prices to save money

Millennials are the least likely age group to price check their car insurance. Among all adults who have car insurance, 17% say they’ve never shopped around for better rates, but 26% of millennials say they’ve never checked car insurance prices.

“Millennials can do a number of things in order to save on auto insurance costs,” Passmore says. “For example we encourage everyone to shop around for the best deal. Consumers have lots of options when it comes to auto insurance coverage.”

Millennials also are the most likely to think they’re paying too much for car insurance.

 Ages 18-34Ages 35-44Ages 45-54Ages 55-64Ages 65+
Data are from a survey of 2,072 U.S. adults ages 18 and older that was conducted online by Harris Poll for NerdWallet from May 3-5, 2017. Price-checking data are for those who currently have car insurance. Data on the respondents who said they pay too much are for those who have ever had car insurance.
I have never price-checked my current insurance26%15%16%12%15%
I think I’m paying too much for my current car insurance31%25%27%25%25%

Perhaps to lower their car insurance bills, millennials are buying less coverage. TransUnion’s study revealed that 37% of drivers ages 22-37 have only liability insurance, compared with 33% of people ages 38-52 and 31% of those ages 53-71. Liability insurance will pay for damage you cause to others, but won’t pay for damage to your own car. For that, you would need a policy with collision and comprehensive coverage.

Amy Danise is a former editor and insurance authority at NerdWallet.