Here’s Why You Need Automobile Liability Insurance

According to an estimate released by the National Safety Council, a nonprofit safety advocacy group, roadside fatalities in 2016 reached 40,200. This was a 6% gain from 2015 and a 14% gain from 2014, impacting business automobile liability insurance rates.

The Council also released these troubling findings:

  • 47% of motorists reported they are comfortable texting while driving
  • 10% of drivers reported driving while drunk
  • 16% of motorists reported not wearing seatbelts on every trip
  • 25% of motorists are comfortable speeding on residential streets

Analysts working for the National Highway Traffic Safety Administration report the increase can be partially attributed to the fact more people are driving more miles due to job growth and lower fuel prices. These analysts cite three main causes for the traffic fatalities:

– Almost 50% of the deaths occurred when passengers were not wearing seat belts
– Approximately 30% of fatalities involved a drunken driver or speeding
– Distracted driving was a factor in approximately 10% of auto deaths

The Council estimated auto crashes cost about $432.5 billion last year, including those stemming from motor vehicle deaths, injuries and property damage.

The cost of auto crashes almost equals one half of 2016 US Social Security benefit payments.

What rising vehicular accidents means to business automobile liability insurance costs

Business automobile liability insurance rates are rising at their fastest rate in more than a decade. Even so, costs associated with crashes are outpacing premium increases for some insurance companies. These insurers report the use of smartphones by motorists to talk, text and access the internet as a new and significant factor causing the wrecks.

In addition to an increase in the number of wrecks, the rising size of business automobile liability insurance claims is affecting several auto insurance companies’ bottom lines. Growing costs for medical care and auto repair are significant contributors to increasing claims severity. The rising price of auto parts is also a contributing factor.

The growing number of accidents “is swamping the much-heralded beneficial impacts of newer, safer vehicles,” according to Robert Hartwig, an insurance professor at the Darla Moore School of Business at the University of South Carolina. Technical advances include rear view cameras, collision-avoidance systems, air bags and anti-lock brakes.

If your company has a fleet of vehicles or if employees use their own vehicles while on company business, share this information with them before they get behind the wheel. Otherwise, your company could be at risk of significant liability in case of an accident.

How KMRD Can Help

KMRD delivers risk management and human capital solutions to over 800 clients nationwide. Our award-winning team, disciplined approach, proven processes, combined with our risk management portal make KMRD the leading choice to improve professional liability protection and reduce the overall cost of risk.

For all clients of KMRD Partners, we make a kit available for each of your vehicles, which will walk your drivers through the process of “what to do” following an accident. If you aren’t already a client, we hope you will give us an opportunity to earn your business.

Get Expert AdviceRequest Auto Risk Assessment About KMRD

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from a KMRD risk professional before taking any action.


Got a Problem? We'd Love to Solve It!

Contact Us