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U.S. traffic fatalities increase, but will insurance?

Death toll rises 5.3 percent in 2012; if trend continues, customers' rates may go up

By  Victor Epstein

For the first time in seven years, more people died on American roads last year than the year before. The increase comes amid growing awareness of distracted driving and could affect auto insurance rates if it's sustained.

U.S. traffic fatalities rose 5.3 percent to 30,080 in 2012 to post the first annual increase since 2005, according to a new report from the National Highway Traffic Safety Administration. The death toll is the highest since 2008, when the United States had a population of 307.5 million — about 8 million fewer people than in 2012.

An increase also occurred in Iowa, where road fatalities rose 1.4 percent to 365 in 2012 from a prior death toll of 360 in 2011, according to the Department of Public Safety. It was the state's first increase since 2007.

Robert Hartwig, president of the Insurance Information Institute, said distracted driving and the increase in driving associated with an improving economy likely played a part in the uptick.

"As people drive more and spend more time on the road, it's inevitable that the number of accidents (including fatal accidents) will increase," Hartwig said. "Rates react to the frequency and cost of accidents associated with claims. Usually it is a sustained trend (that) drives rates. It's too soon to say whether this is a trend."

Lowest auto rates

Iowa has the second-cheapest auto insurance in the nation, with an average annual cost of $1,028 this year, according to the website. Only Maine is cheaper at $934. Louisiana is the most expensive at $2,699, followed by Michigan at $2,520.

Gilbert Korthals, chief actuary at West Des Moines-based GuideOne Insurance, took a similar view.

"Because this is the first time in eight years that there has been an increase in motor-vehicle fatalities, most likely, auto insurance rates will not be impacted," Korthals said in a statement. "However, if we begin to see a trend where fatalities are increasing year after year, this could trigger rates to begin increasing."

The increase brings an end to a six-year reduction in U.S. roadway deaths that brought them down to a 60-year low in 2011. Fatalities dropped by 26 percent from 2005 to 2011, according to the federal report released Friday.

The fatality rate for every 100 million vehicle miles traveled was 1.09 last year, up from the 0.98 death rate recorded in 2011 and 2010. Standardized federal traffic fatality statistics date back to 1975 and play a role in auto insurance rates.

The report made no effort to identify the cause for the increase. However, U.S. Transportation Secretary Ray LaHood has repeatedly emphasized the hazards of distracted driving.

A National Highway Traffic Safety Administration report released last month estimated that 660,000 drivers are simultaneously using cellphones or manipulating electronic devices while driving at any given time during the day. More than 3,300 people were killed and 387,000 injured in 2011 in crashes involving a distracted driver, according to the agency.

"Distracted driving is a serious and deadly epidemic on America's roadways," LaHood said in a statement. "There is no way to text and drive safely."

Lawmakers in Connecticut, where hand-held phone use and texting are both illegal, are considering legislation that would increase the fines for distracted driving, add violations to a motorist's driving history and notify his insurers of violations. Texting while driving is illegal in Iowa, too.

Seven of the nine geographic regions in the U.S. recorded increases in 2012 in the federal traffic fatality study, with the Northeast region recording a 15 percent uptick. Deaths fell by 1 percent in the New York-New-Jersey-Pennsylvania region and in the Pacific Northwest. Traffic fatalities rose 5 percent in the Midwest region that includes Iowa, Nebraska, Kansas, Missouri and Arkansas.

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