Drivers in New York are banned from using hand-held cell phones while driving, and this week they will be getting an extra penalty if caught doing so. Since the statewide ban of using cell phones while driving in New York was enacted, the penalty has been a fine of up to $100. The Online Auto Insurance News article “Strengthening of NY Distracted Driving Law Has Car Insurance Implications” by John Pirro states that drivers will now receive two points on their drivers license in addition to the fine.
When drivers get a State Farm auto quote or price another car insurance company, having extra points on their license will likely make their premiums increase. Insurance companies price their policies based on the risk that drivers carry and they use driving records to determine an individual’s risk. Extra points, whether from talking on your cell phone, speeding, or a DUI, mean extra risk to your car insurance company.
You may think it is harsh that car insurance companies would increase premiums based on two points from a cell phone violation, but New York’s DMV found that 20% of car accidents were caused by drivers being distracted. While not all of them were on their cell phones, it is likely that some of them were. Since New York was the first state to implement this ban in 2001, more than 300,000 tickets have been issued yearly for talking or texting while driving. Since insurers look at dozens of factors when determining rates, whether a violation will up your premiums or not really depends on more than the added points.
Homeowners carrying State Farm insurance will find out in the next few weeks whether they are a part of 125,000 policies that the insurer plans to purge. The major homeowners insurance company originally set out to eliminate over 800,000 policies, but settled on the lower number in exchange for a higher interest rate.
In May 2009, we reported that State Farm was to hold a meeting with Florida insurance regulators with the intention of ridding itself of hundreds of thousands of property and homeowners insurance policies.
In the negotiations, the insurer was encouraged keep the majority of its policies.