A recent article from the Canadian Broadcast Corporation about one man who got the boot from his insurer is shedding light on an odd auto insurance rating factor that insurers north of the border are able to use.
According to the article, a 25-year-old man living in Halifax, Nova Scotia, was recently dropped by his insurance company. But the move wasn’t because he got into one too many accidents, paid his payment late, or committed a serious violation while behind the wheel. His insurer did it because it found out he had received a ticket for skateboarding without a helmet.
A follow-up from The Globe and Mail confirmed that, yes, Canadian insurance companies can in fact use helmet violations to raise your rates or drop you entirely. And Canadian parents can even feel the financial pain when their kids get ticketed for riding a bike or skateboarding with no cranial protection.
“Helmet violations, like seat belt violations, are an indicator of risk-taking behavior which might reflect on the driving patterns of the insured,” a spokesman from the Insurance Bureau of Canada told The Globe and Mail, which is why it can affect rates.
Could It Happen in the U.S.?
Chances are that this story wouldn’t have happened in the U.S. due to state-based restrictions on what insurers can and can’t use when determining prices and eligibility for coverage.
But if an American insurer were able to raise rates or cancel coverage completely due to a ticket for skateboarding or cycling without a helmet, chances are such a scenario would apply only to personal injury protection (PIP) coverage.
PIP policies are only available in about 12 states. They provide coverage for medical treatment needed by those covered under the policy after being in a car accident, but not just if they were inside one of the cars involved in the accident; it also covers individuals when they’re walking or riding a skateboard or bike.
National crash data show that pedestrians and cyclists make up a significant amount of crash-related injuries and an even more significant amount of crash-related deaths. According to data from the Department of Transportation, pedestrians and cyclists accounted for about 5.5 percent of crash-related injuries and about 15 percent of crash-related deaths in 2010.
In theory, if an insurer were looking at an application for coverage and saw that one of the people that would be insured under the policy had a ticket for skateboarding without a helmet, it could raise a red flag. Since PIP covers treatment of crash-related injuries not only for drivers or passengers but also for pedestrians, the insurer has an interest in whether the people covered under a policy are going to minimize their risk of getting seriously hurt while walking or riding a skateboard or bicycle. If someone insured under the policy has a history of not wearing a helmet while skating or cycling, it could signal to the insurer that an accident involving that someone might end up being more serious and more costly than if they followed helmet laws.
However, comments from regulators in Florida and Michigan — two states where PIP insurance is a necessity — indicate that insurers in the U.S. likely don’t use helmet violations rating factor.
“According to the Property & Casualty business unit staff, we have not heard of an insurer specifically doing this or seen any filings where an insurer explicitly stated that helmet violations would be included in the determination of the premium for any auto coverage,” the Florida Office of Insurance Regulation’s deputy director of communications, Amy Bogner, told us in an email.
And Teri Morante, the senior deputy commissioner of Michigan’s Office of Financial & Insurance Regulation, said regulators in her state also haven’t seen pricing schedules that include helmet violations as rating factor.
“With regard to rating, under Michigan law, insurers are allowed to develop rates based on factors that reflect reasonably anticipated increases in losses or expenses and thus are not unfairly discriminatory, whether for PIP or any other coverage,” she told us in an email. “However, we are not aware of any insurer manual that specifically mentions that helmet violations will be surcharged.”
Michigan insurers might in theory be able to use helmet-ban violations as a basis for raising rates, but they would have to prove a statistical correlation showing higher losses from people with those violations on their records, and Morante hasn’t seen any try.
A Michigan insurer full-on denying someone coverage based on helmet violations is even more unlikely. According to Morante, almost all insurers in the state have to comply with a section of the Michigan Insurance Code that says they can consider only “moving violations pertaining to the operation of motor vehicles” when determining an individual’s eligibility coverage. That means anything you do outside of a moving car is off limits.
