Does Texting and Driving Affect Insurance?

Texting and driving does affect your insurance, as this is becoming more and more of an issue, but it depends on your state. On average texting and driving will make your insurance go up by 23%.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jul 22, 2021

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Here's what you need to know...

  • Texting while driving is a dangerous habit that should be avoided at all costs
  • Texting while driving has serious consequences in several states around the country
  • Being ticketed for texting while driving will increase your insurance rates, generally by 23%

With the explosion of the use of cell phones and other hand-held devices, it was only a matter of time before car insurance companies began asking how often these devices are involved in motor vehicle accidents.

The newest part of the equation is texting while driving, where you’re using one or both hands to text while still trying to maneuver the vehicle.

Texting while driving is a dangerous practice that should never be undertaken.

According to the Federal Communications Commission’s “Texting While Driving” guide, this practice is a serious problem in the United States.

The FCC cites statistics from the National Highway Traffic Safety Administration showing that as many as 16 percent of all fatal car accidents are caused by people sending texts while behind the wheel.

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Is it illegal to text while driving?

As of 2011, texting while driving is illegal for all drivers in 14 states. Of the remaining 36, 10 restrict new drivers and one restricts commercial drivers.

In most states where there are no current texting while driving laws, the push is on to get them on the books as soon as possible.

There are five states, like New York, which completely ban the use of hand-held phones in any manner while driving, a trend most of the currently non-covered states are pursuing.

In addition to banning the use of cell phones, many of these states are also looking to make their laws comprehensive enough to cover all sorts of distractions.

Insurance companies are mostly in support of these new laws because drivers will be safer and therefore better for business.

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Why would insurance companies care if I’m texting while driving?

Like it or not, car insurance is a business that must operate under certain parameters to stay in business, the most important parameter being profit.

Business owners and investors are not likely to continue pouring money into a business that does not make a profit.

Therefore, an insurance company must earn money for its owners and shareholders if it expects to survive.

The cost of covering injuries and damage resulting from car accidents is extremely expensive.

Any risky behavior, such as using a cellphone for anything while driving, increases the likelihood that your car insurance company will have to pay out a sizable claim.

To reduce their financial losses and maintain their profits, they must charge a higher price for insurance.

How high will my rates go if I’m caught texting while driving?

Does your insurance go up for texting and driving? Will my insurance go up for a texting ticket? The increase of your rates will vary according to a variety of factors.

In states like Vermont, texting while driving is a violation with a set penalty, providing insurance companies with a clear baseline.

But in states where it’s not yet illegal, insurance companies must adjust rates by looking at other circumstances such as accidents, speeding tickets, or moving violations that may be related to texting.

Additionally, many drivers involved in accidents while texting don’t report their actions to the police officer investigating the crash.

Since many states and local municipalities do not require officers to ask whether or not cell phone use was involved, it’s estimated by insurance experts that most texting while driving incidents is unreported.

Some experts believe cell phones are largely responsible for a steady increase in traffic accidents over the last 10 years.

What if my passenger is the one doing the texting?

Who is affected by texting and driving? Allowing passengers to handle the texting and talking for you while you’re driving is obviously a much better choice than doing it yourself.

However, the nature of cell phones and texting means that their very presence in the car can be very distracting to the driver.

Safety experts warn that cell phones and texting can be addicting to the point where they disrupt every area of our lives including driving.

If you must use your cell phone behind the wheel, always use it hands-free for talking purposes only. Under no circumstances should you ever text while driving.

If you do, you could very likely kill yourself or someone else. Is any text message that important?

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