Fatal Crashes Are Surging; Buffett Says He Knows Why

If automobiles are constantly improving, why are traffic deaths going up? Warren Buffett thinks he knows. Fatal accidents surged 14% in the first half of the year, and one of the consequences of that is that Geico lost money and is now raising insurance premiums. Buffett's Berkshire Hathaway owns Geico, and he weighed in on the cause of the increase in accidents via email to the Wall Street Journal: "If cars are better—and they clearly are—drivers must be worse (adjusted for mileage)," he wrote, noting that mileage is only up by about 3.5%. Therefore, he thinks distracted driving—think people texting, talking on the phone, or otherwise using mobile devices while driving—is largely to blame for the rising number of crashes.

Officially, industry executives aren't blaming distracted driving; they say low gas prices, an economic recovery allowing people to do more driving, and bad weather in some areas are to blame. Allstate also saw declining profits and is raising rates as a result, and that company's CEO seems to agree with the experts: "More miles driven, more cars on the road, more accidents," he says. But the National Safety Council, which put together the numbers on fatal crashes, notes that one in four car crashes does involve cellphone use, and the council's president says existing laws against distracted driving aren't enough to deter people. The president of the Insurance Information Institute agrees that "the prevalence of texting" could be contributing to the numbers. (More Warren Buffett stories.)