How The Hands-Free Law May Affect Your Car Insurance Premium

MINNEAPOLIS (WCCO) -- Minnesota's new hands-free law is expected to impact car insurance premium costs, depending on how well drivers abide by it.

Mark Kulda, from the Insurance Federation of Minnesota, explained insurance premiums have become roughly 15 percent more expensive over the past three years, due in part to distracted driving. A struggling economy and improved safety features caused rates to dip significantly in the mid-2000s, before distracted driving became a problem.

Of the 17 states that have a similar hands-free law as the one Minnesota will implement on August 1, all but one -- Illinois -- saw the trend reverse.

"They saw a direct reduction in claims cost, which leads to lower premiums," said Kulda. "The average has been about 15 percent, and we think in Minnesota we're probably going to do a little better than that. We're very good at following the law once it's in place."

He thinks it'll take a year or two for the data to show and the prices to adjust accordingly. However, the financial stakes are high for people who choose to break the law. Including court fees, first citations are expected to cost more than $100, and well over $300 for every one thereafter.

Insurance companies will see it as a moving violation, and premiums could change depending on driving record, experience, or whether the distracted driving caused a crash.

"There are companies that do accident forgiveness or they'll do good driver discounts," said Kulda, pointing to the perks that could be taken away in the event of a crash. "It will be treated as a moving violation, and you may lose your good driver discount. You may get surcharged if you have a history of other tickets."

Policies vary by company, so he advises anyone who has questions to ask their insurer.