When video games raise insurance premia
Video games are a lot of fun… or so I am told. I haven’t played a video game in more than 20 years, but I used to love them. And I am convinced they have become much, much better than in the 1990s.
By now, games like Pokémon Go can not only be played everywhere but are supposed to be played everywhere. Just be careful when you play an augmented reality game, not to crash into other people, walk into a tree, etc.
Should be common sense, really, but when it comes to people common sense is just not too common. The unfortunate thing is that the more morons we have, the higher our insurance premia get.
Mara Faccio and John McConnell examined car accident statistics in Indiana before and after the introduction of Pokémon Go in 2016. And guess what, people were driving their cars to hunt down Pokémon. And when they found one, they sometimes stopped without warning, swerved or made other erratic movements and caused accidents. In the five months after the introduction of the game, they found that there were c134 more car crashes in Tippecanoe County, IN, costing causing incremental damages of 0.5 million Dollars. If you add the cost of injuries to people (there were even two incremental fatalities), then the cost of playing Pokémon Go to society were between $5.2m and $25.5m. While that may not sound like much, this amounts to somewhere between $2bn and $7.3bn in cost across the whole of the United States. Just the costs to cars and other property alone (ignoring the injuries and costs to health insurers) would increase property insurance premiums by at least 2.5% if insured.
In other words, augmented reality video games are the tobacco of the 21st century. They are widely consumed and have unhealthy side-effects that are not accrued as costs to the producers of the video games but instead borne by insurance companies – and raise premiums for all of us.
I think it is time we ask for higher insurance premia from people who play video games or use social media. Come to think of it, that would probably reduce social media use quite a bit everywhere. And make the world a better place in my view…