- Insurance
|
|
Coincidence?
By James J. Baxter, NMA PresidentA recent article in the Wall Street Journal notes that for the first time since 1973 automobile insurance rates will decline nationwide. The article further explains that the losses incurred by auto insurance companies have been declining at least since 1997.
Of course the insurance companies and the government types give all the credit to seat belt laws, anti-drunk driving measures and theft prevention devices (you know, the gizmos that make it almost impossible for you to get in your car if you locked your keys inside). But, hey these laws and devices have been around and in wide use for a decade or more. How come the losses have just started to decline since 1996?
Isn't it interesting that the last year that insurance rates declined was 1973, the last year before the federal government decided it, and not the states should set highway speed limits? And, isn't it even more interesting that when the federal government gave up on its 55 mph folly and returned speed limit authority to the states, auto insurance losses began a continual decline!
Could there be a connection? Yes there could.
The federal 55 mph speed limit disrupted normal traffic flow, ruined lane discipline, and encouraged traffic to move to less safe highways. Federal sanctions and enforcement incentives caused an allocation of enforcement resources to purposes that were counter-productive to public safety needs. Enforcement of the absurd 55-mph speed limit took precedence over helping stranded motorists, seeking out impaired drivers, controlling traffic in construction zones and targeting truly dangerous and reckless drivers.
Repeal of the 55-mph speed limit was bitterly opposed by the insurance industry, which predicted blood and mayhem in the streets and huge increases in auto insurance costs. Organizations funded by insurance companies went so far as to claim that repealing the 55-mph speed limit would result in 6400 additional fatalities, annually! It didn't happen.
In 1996 the states resumed total control of their speed limits and within two years the vast majority have increased or extended their highest speed limits. A degree of balance has returned to enforcement priorities, traffic is moving more smoothly, lane discipline is being given more publicity and attention and drivers are leaving less safe two lane highways for the convenience and speed of Interstates and expressways.
Better highways and better cars have certainly improved highway safety and indirectly reduced certain insurance costs. But don't sell the benefits of rational speed limits short. Not only are they more comfortable and more efficient, they are also safer.