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Will raising the speed limit raise the rates for your auto insurance?

Drivers feeling the need for speed may want to plan a road trip through Texas.

A state law passed in May 2011 and being carried out by the Texas Department of Transportation raises the speed limit to 75 miles per hour on close to 1,500 miles of roadway, spanning 60 counties across the state. Add that to 3,600 miles already posted at 75 mph or higher, and that gives Texas some of the fastest roads in the country.

speed limit auto insurance What can drivers expect from the changes, aside from a little more wind in their hair?

“The trade-off is clear,” says Russ Rader, a spokesman for the Insurance Institute for Highway Safety. “Raising speed limits gets people to their destinations faster, but the downside is more severe crashes and more deaths on those roads.”

Higher speed limits: Death trap?

A long history of raising and lowering speed limits in the United States has given researchers fertile ground to study the effects. And, Rader says, “study after study shows that when speed limits go up, deaths go up, and when speed limits go down, deaths go down.”

According to a 2009 study by the University of Illinois at Chicago, when the national speed limit dropped to 55 miles per hour in 1974 (a response to the oil embargo), traffic deaths dropped by 17 percent. In the 10 years after the national maximum speed limit was repealed in 1995, about 12,500 people died in crashes that researchers blame directly on higher speed limits.

But Kelli Petras, a spokeswoman for the Texas Department of Transportation, says raising the speed limit in Texas actually might make motorists safer. The problem, she says, isn’t higher speed limits themselves -- it’s the gap between the slowest and fastest drivers on the road.

“If you can get 85 percent of the cars on the roadway to drive the same speed, that limits or reduces the number of accidents we see," Petras says. On the other hand, if drivers are regularly going too fast or too slow for the posted speed limit, “you have a larger number of accidents, because you’ll have a greater speed differential," she says.

By raising the limit to more closely match the speed most drivers already are going, she says, you narrow the difference between the tortoises and the hares, leading to fewer accidents. That’s what the Texas Department of Transportation found in 2005 when it raised some interstate highway speed limits to 80 mph.

“Everyone was extremely nervous about what the results would be,” Petras says. “It turned out that we saw a reduction in traffic accidents, because most motorists were already traveling at that speed.”

Faster cars, higher rates?

Just as it’s not entirely clear whether the higher speed limits will lead to safer or scarier driving, it also remains to be seen how they’ll affect auto insurance rates for Texas drivers.

“Insurers don’t look at the laws of the land to set rates, they just look at what claims are coming in,” says Mark Hanna, a spokesman for the Insurance Council of Texas, a trade group for insurance companies in Texas.

If critics are right, and higher speed limits lead to more frequent -- and more severe -- car accidents, the domino effect may indeed lead to a rate bump.

“When you have more property damage and more extensive injuries (from auto accidents), that results in higher repair costs and medical costs. That leads to costlier claims, which eventually leads to raising the premiums to pay for the claims,” Hanna says.

That won’t happen instantly, and it won’t happen universally. With 500 insurers doing business in Texas, it’ll be up to each insurer to analyze the data and set its own rates. But for now, drivers in Texas -- and anywhere else -- can do these three things to stay safe, smart and well-insured on the road.

1. Travel the speed limit. Safety experts worry that even if the sign now says 75 mph, drivers always will creep a little past the limit, to 80 or 85. But getting a speeding ticket "will get the attention of your insurance company, who’s looking at the risk associated with insuring a particular driver,” Hanna says. To keep your rates low -- and to stay safer on the road -- don’t blow past the posted limit.

2. Invest in a safe car. With side curtain air bags and other safety systems, cars are safer than ever. (Check out the Insurance Institute for Highway Safety's website for vehicle safety ratings.) But, Rader warns, “when crashes happen at very high speeds, all the safety systems you have built into your vehicle can be overwhelmed. Crash tests on vehicles are conducted at 35 to 40 miles per hour, not 75 or 80.”

3. Be responsive. The smartest drivers know that you can’t always go the maximum speed limit. “There could be ice, rain, wind, blowing dust. We have all kinds of weather conditions in Texas that don’t really call for a driver to be driving the maximum speed,” Hanna says. Responding to road conditions and keeping pace with other drivers around you is the smartest way to stay safe on the road.

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