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Car insurance premiums may penalise drivers with bad habits.
Billionaire investor Warren Buffett said that insurance provider Geico, which is owned by Berkshire Hathaway, is amending its underwriting process as there are growing concerns about reckless driving habits.
“If I had to bet and people at Geico won’t like me saying this, but I think our underwriting experience will be better in 2016 than it was in 2015,” he said.
“I personally believe that distracted driving…went up a fair amount,” he added.
Buffett added that safer cars have caused drivers to be more reckless on the road, leading to a higher incidence and greater seriousness of accidents.
“People did not drive as well (in 2015) as they did the year before,” Buffett told CNBC, according to a Dow Jones Newswires report
With an 8% year-over-year increase, motor vehicle deaths escalated more in 2015 than they had in the past 50 years, according to a February report by the National Safety Council. The NSC partly attributed the rise in accidents to higher traffic on roads caused by low fuel prices and booming auto sales.
With the mass popularity of smartphones and other devices, distracted driving is also becoming a greater problem on the roads. In the past month, about 70% of drivers have driven while talking on their mobile phone and nearly half read a text or email while behind the wheel, according to the recent AAA study.
The U.S. National Highway Traffic Safety Administration estimates that at least 3,000 motor vehicle deaths each year involve distracted driving.
If the Oracle of Omaha is as good at predicting insurance trends as he is at market trends, drivers could be seeing financial consequences as well as legal consequences for distracted driving habits.