In Texas, the department of transportation is currently debating increasing the speed limit on a stretch of highway from San Antonio to Austin to 85 miles per hour.  If this change is made, then this stretch of highway will have the highest speed limit in the United States.  And this begs the question: What is the relationship between higher speed limits and accident frequency?

So do higher speed limits cause more accidents?  In study after study, the answer is a resounding no.  But when accidents occur at higher speeds, the damages and injuries are much more severe.  Death rates in high speed accidents are always much higher than in those at reduced speeds.  So what should determine the best speed limit for safety?

As it turns out, most studies indicate that the optimum speed limit for a highway is a speed at or below the speed at which 85% of the drivers would drive at any given location in optimum weather conditions.  You see, while high speed accidents generally are more fatal and cause more damage, the factor that causes more accidents on highways is a large discrepancy between the fastest cars and the slowest cars.  In turns out that most people won’t drive faster than their speed comfort zone.  I know this seems a ridiculous notion given how many drivers you see texting and talking on the phone while they drive, activities that are actually much more dangerous than speeding.  But people recognize that speed can kill them and will rarely drive faster than they can control their vehicle.  By choosing a speed limit that suits 85% of the drivers, police can then more easily find those that are the speeding outliers who need to be controlled by ticketing.

But wait, isn’t driving slower always safer?  Actually both state and federal studies have consistently shown that the drivers most likely to get into accidents are those traveling significantly below the average speed of the other drivers on the road.  Those driving 10 mph slower than prevailing speed are more likely to be involved in an accident than those traveling 10 mph faster than the average speed. 

One thing that should be taken into account with higher speeds is that stopping distances are increase rather dramatically.  The stopping distance for a vehicle traveling 60 mph is just over half of that of the same vehicle traveling at 85 mph.  So increased speed limits need to be accompanied by some changes in driver habits and that doesn’t always happen.

If those driving on highways at speeds above the speed limit are less likely to get into accidents than those traveling at speeds below the speed limit, then why do auto insurance companies charge you higher rates if you have speeding tickets on your driving record?  In my opinion this is an example of a relic of old thinking that still remains in our laws.  Ironically, if you can get your ticket reduced to less than 10 miles over the speed limit, then you can have the extra points on your auto insurance policy waived.  But if you get a speeding ticket for going more than 75 mph in NC – which in some cases might be only 6 mph over the speed limit, then you could face a 4 point surcharge.  You can quickly see that this approach flies in the face of all research and does not make any actuarial sense at all.  I think with the increased use of on board monitoring systems for auto insurance rates, that eventually some of the speeding ticket insurance surcharges will be changed.

If you need any help with your auto insurance policy, or if you have questions about auto insurance, please call our office, toll free, at 877-687-7557.

Workers compensation insurance from its infancy has always been a compromise.  The law set up a system that protected employers from lawsuits by its employees and in exchange for the stability that this created, the employers were to purchase workers compensation insurance to pay for the on the job injuries and diseases that befell their employees.  Over time, some of the rules created by different states have eroded the spirit of this compromise and in North Carolina, that means some injured employees have no way to collect the benefits that they are due from their employers.

In early May, 2012, Governor Bev Perdue ordered swift reform of our system.  This was prompted by a number of uninsured employers who have outstanding claims due that have not met their financial obligations to their injured employees.  In a show of strong action, the North Carolina Industrial Commission, the governmental entity responsible for resolving these claims, rounded up about 100 delinquent employers and threatened them with jail time should they not pay their injured employees what they are due.

But let’s back up a bit.  You might be wondering how some employers were without workers compensation insurance when their employees became injured.  Isn’t this insurance a requirement for all employers?  Well, in NC there is a rule that says that if you have less than 3 employees, you don’t have to purchase a workers compensation insurance policy.  If you don’t buy a policy though, this does not get you off the hook for the injuries of your employees.  You just now have to pay for those injuries yourself.  Now I ask you, does this make any sense at all?  Why should a small employer be more able to pay for on the job injuries of its employees than a larger employer?  The answer of course is that they are not.  In fact, a small employer is even less likely to have the assets needed to pay the medical bills, the loss of income and death benefits required when on the job accidents maim or kill an employee.  NC is one of the few states with such a silly rule and to go along with this, NC also has one of the most lax enforcement of the workers compensation rules that you will find. 

With Governor Perdue’s new initiative to find the scofflaws and make them pay or go to jail, there was a glimmer of hope that the workers compensation system would leave us with less and less of these sad stories where an employee is maimed for life and the employer, not having purchased any workers compensation insurance, claims that he has no assets to pay the claim.  Now , however, we see that when push came to shove, the North Carolina Industrial Commission chose mercy for the employers over the injured employees.  No employers were thrown in jail, those that couldn’t or wouldn’t pay what was owed to injured workers were granted extensions to make good on their settlements.  No one was arrested.  It is estimated that as many as 10,000 employers in NC are without workers compensation insurance coverage.  Will the Industrial Commission find ways to identify them and force them to obey the law like other states do?  Will they change the law to force all employers with any employees at all to purchase a policy to protect what they don’t have the assets to protect?  I have to say, at this point in time I am not encouraged by what I see.

If you own a business and you have any employees at all, I urge you to make sure that you have a workers compensation policy in force.  This is a financial and moral obligation that when fulfilled will protect your business from a potential huge financial loss and quite possibly jail time.  Clinard Insurance Group has many great workers compensation insurance products for you to choose from.  We can help you find the insurance company that is best suited for your specific type of business.  Please give us a call, toll free, at 877-687-7557.  We look forward to helping you.