Warren Buffett: Car Insurance Rates Going Up Due To Distracted Driving
PITTSBURGH (KDKA) -- Are your car insurance rates going up?
Billionaire Warren Buffett seems to think so, according to an interview he did with CNBC.
Geico Insurance is part of his empire, and profits are down because of more traffic accidents and more severe accidents.
He believes distracted driving is part of the problem, and we're all probably going to pay more as a result.
"We find that distracted driving is the number one killer of teenagers 16 through 19 in the United States," said Chelsea Pompeani of AAA.
In a study just released by AAA, 70 percent of people admitted to talking on a cellphone while driving. Forty-two percent admitted to reading a text while driving, and 32 percent say they actually type or send a text while driving.
"We live in such a social media savvy world that people always have their phones and they're always checking their phones, so it's become a real problem," said Pompeani.
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Just last summer, an Uber drier on West Liberty Avenue captured video of a car nearly striking him and he believed the woman behind the wheel had been texting.
It's estimated that the number of traffic deaths went up eight percent last year, and in a CNBC interview, Buffett says rates are rising as a result of more crashes and more severe crashes.
"I personally believe distracted driving which was listed for about 10 percent of the deaths in 2014, I'll bet that number went up a fair amount," said Buffet.
When he was asked if by distracted driving, he meant someone who's either talking on their phone or texting while driving, he said: "Yeah. One way or another distracted."
Duquesne University Marketing Professor Audrey Guskey Ph.D. says more accidents hurt the insurance industry's bottom line.
"Geico who Warren Buffett owns, the situation with that is their profits went down about 37 percent. As did Allstate's, about 50 percent," said Guskey. "So you add all that together and insurance companies have no real choice but to increase our rates."
Guskey says there's one more component to this: the death rate could be up because the economy is picking up and people are driving more as a result.