THE MVR RISK
Greg Ferrara
CVP Underwriting QA, Research & Training
April 4, 2011
The Company You Keep®
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Antitrust
New York Life adheres to the letter and spirit of the
antitrust laws. The information in this lecture is
intended to advance the knowledge and improve the
risk assessment skills of the participants. Under no
circumstances shall this lecture be used as a forum
for the pricing of specific products, determining how
they are marketed, or for any other anticompetitive
purpose.
Copyright 2010 New York Life Insurance Company. All rights reserved.
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OVERVIEW
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MVRs- The Good, The Bad, The Ugly
Motor Vehicle Accidents
Speeding
DUI / DWI
Driving While Suspended / Revoked
Careless vs Reckless
Minor Violations
Multiple Violations
Red Flags
Questions
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MVRs- The Good, The Bad, The Ugly
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Integral component of evaluating risk
Cost-effective
Each state has a different format
Nomenclature varies from state to state
Subtle factors are easy to miss
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Motor Vehicle Accidents 2007
41,059
2,491,000
112 (24 hrs)
1 (13 minutes)
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Motor Vehicle Accidents 2007
• #1 cause of death for ages 4 – 34
– #3 for ages 1-3
– #5 for ages 35 -44
• Minor Accident
– Non-injury
– No fault
– Cited accident with no details
• Major Accident
– Injury
– Major property damage
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Motor Vehicle Accidents
• Factors
– Age
 16 – 24: 24% of all traffic fatalities
 25 – 54: 46% of all traffic fatalities
– Gender
 Males: 71% of all traffic fatalities
• Red Flags
– Vehicular Homicide
– Vehicular Manslaughter
– Vehicular Assault
– Hit and Run
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Speeding 2007
• Contributing factor in
31% of all fatal accidents
• 13,040 lives lost
• 88% of fatalities due to
speeding were on roads
that were not an
Interstate Highway
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Speeding
• Speeding impacts
– the driver’s ability to steer safely around curves or
objects in the road
– extends the distance needed to stop
– increases the distance a vehicle travels while the driver
reacts to danger
• For drivers involved in fatal accidents, young males
most likely to be speeding
• As driver’s age increases, numbers of speeding
related accident fatalities decrease
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Speeding 2007
• Speeding + Alcohol = DEATH
– 40% of drivers w/BAC .08 and up were speeding when
a fatal accident occurred
• Speeding + No Seatbelt = DEATH
– Under age 21 in fatality – 51% speeding & no seatbelt
– 21 and older – 55% speeding & no seatbelt
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DUI / DWI
• Decreasing numbers of ETOH
related fatalities
– 1982: 26,000
– 1994: 17,300
– 2007: 12,998
• Cause
– New state and national laws
– Media attention
– More law enforcement
– Improved vehicle and highway design
– Increase in public awareness of the
seriousness of impaired driving
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DUI / DWI - 2007
• Bad news
– 55% of drinking drivers had BAC at or above .15
– The12,998 deaths accounted for 32% of MV fatalities
 Age is a factor
 21 to 24: 35% of deaths
 25 to 34: 29% of deaths
– Drivers with BAC of .08 and higher, that were involved
in fatal accidents, were 8 TIMES more likely to have a
PRIOR conviction for DUI / DWI
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DUI / DWI
• AKA
– Administrative Per Se
– Conditional Privilege
– Implied Consent
– Interlock Device
– Wet Reckless
– Zero Tolerance
• Possible AKA
– Open Container
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Driving While Suspended / Revoked
• Suspended
– Takes away the privilege to drive for a short period of
time
– To reinstate, the driver must pay a fee to restore the
license
• Revoked
– Cancels the license
– To reinstate, the driver must apply near the end of the
revocation period
– State motor vehicle administration will conduct a
review of the driver’s history and decide if the license
can be reinstated
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Driving While Suspended / Revoked - 2007
• Nearly 18% of all fatal accidents involved at least
one improperly licensed driver
• Compliance with suspension or revocation orders is
almost totally disregarded
– As many as 80% of those with suspended or revoked
licenses continue to operate motor vehicles
• California impounds the vehicles owned by DWS/R
offenders resulting in an accident reduction rate
– For 1st time offenders: 25%
– For repeat offenders: 38%
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Status Suspended or Revoked
• Current license status reads Suspended or Revoked
– Many driving records do not clearly list the reason for a
suspension or revocation
– May require eliciting details from the proposed insured
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Careless Driving vs Reckless Driving
• Careless
– When a driver does not operate a vehicle in a careful
and prudent manner
– Conviction usually results in a fine
• Reckless
– More serious than careless
 A willful or wanton disregard for the safety of persons or
property
 Misjudgment of common driving procedures, often
causing accidents
– Punishable by fines, imprisonment and license
suspension or revocation
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Minor Violations
• Some examples
– Disobeying a traffic signal or stop sign
– Improper passing, turning, backing
– Following too closely
– Driving the wrong way, on a shoulder, uninsured
– Failure to signal, yield to pedestrian
– Operating out of class, overloaded vehicle
– Cell Phone (some states)
– Seatbelt
• Conviction usually means paying a fine
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Minor Violations – Cell Phones
• Driver Distraction
• Risk
– NEJM study (1997)
 4 times more likely to have an accident
 Equal to driving with BAC of .10
 Hands-free device provided no safety advantage
– 2010 data suggests that 28% of accidents (fatal and
non-fatal) are caused by a driver on a cell phone
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Minor Violations - Seatbelts
• National Highway Traffic Safety
Administration estimates that in
2007, seatbelts saved 15,147 lives
• 33% of passenger car and 37% of
light truck occupants in fatal
accidents were unrestrained
• 31% of unrestrained occupants were
totally ejected
– 76% of those ejected died
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Multiple Violations
• AKA:
– MVR may state frequent, habitual or chronic offender
• Note carefully the number of violations, type of
violations and dates of occurrence
• May indicate a tendency toward risky behavior in
general
– The entire case may warrant a closer look
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Red Flags
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Multiple DUI / DWI convictions
DUI / DWI in a young person
Major Accidents
Multiple recent speeding violations
Speeding + ETOH
Speeding + no seatbelt
Reckless driving
Multiple occurrences of suspended/revoked
license
• Current suspended or revoked license
• Scofflaw
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Credits
• The statistics quoted in this presentation were
provided by:
– The National Highway Traffic Safety Administration
– The Insurance Information Institute
– The New England Journal of Medicine
– U.S. Department of Transportation
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