Daylight Saving increases your insurance premium

Published Date: 11/10/2023

Daylight Saving Time: The Hidden Factor Behind Rising Insurance Premiums

Twice a year, Americans brace for that familiar disruption — the shift in time known as Daylight Saving Time (DST). Whether we “spring forward” or “fall back,” the ritual often brings more groans than gratitude. People complain about lost sleep, sluggish mornings, and confused body clocks. But what many don’t realize is that this simple one-hour adjustment also brings something else: higher insurance premiums.

In a fascinating episode of Insurance Hour, insurance expert Karl Susman dives into an overlooked consequence of our biannual clock change — how it affects car accidents, health emergencies, wildlife collisions, and ultimately, your insurance rates.

It turns out that the consequences of Daylight Saving Time are not just about feeling tired. They’re measurable, costly, and have ripple effects across the insurance industry.

The Confusion Around Why We Even Do This

Before getting into insurance impacts, Susman poses a question that many of us have probably asked: Why do we even have Daylight Saving Time?

Contrary to popular belief, DST wasn’t created for farmers — a common myth that persists to this day. Farmers, in fact, largely opposed it when it was introduced, because it disrupted their working routines. It also isn’t primarily about saving energy, as modern studies have shown negligible (and sometimes negative) effects on energy usage.

The truth? Even experts can’t seem to agree on a clear, consistent reason. The origins of Daylight Saving Time date back to World War I and II, when governments experimented with adjusting clocks to maximize daylight hours and conserve energy. But in the modern world of 24-hour commerce and artificial lighting, that logic simply doesn’t hold up.

Yet, despite confusion and complaints, we continue to change our clocks — and pay for it, sometimes literally.

The Startling Statistic: 7.6% Increase in Fatal Car Crashes

According to industry research cited by Susman, the single-hour shift from Daylight Saving Time results in a 7.6% increase in fatal car crashes during the week that follows the time change.

That’s not just a minor fluctuation. It represents hundreds of preventable deaths every year, directly linked to sleep deprivation and circadian disruption. These accidents also lead to a surge in insurance claims — property damage, medical costs, liability expenses — all of which ripple through the system and eventually lead to higher premiums for everyone.

The connection is clear:

• More crashes → more claims.
• More claims → higher insurance costs.

Even if you personally drive safely, you’re part of a shared risk pool. So when claims rise industry-wide, your rates can increase along with everyone else’s.

The Deer Problem: Wildlife Collisions Surge After the Clock Change

If human fatigue weren’t enough, there’s another side effect of Daylight Saving Time that affects drivers — wildlife.

Susman cites data showing a 16% increase in deer-related car accidents during the week following the time change. And the risk doesn’t vanish after seven days — the following week still sees a 10% increase in animal collisions.

Why does this happen? Simple biology. Wildlife patterns are driven by daylight, not by our arbitrary clock adjustments. When humans shift their driving schedules, we suddenly find ourselves on the road during dawn and dusk — peak movement times for animals. The mismatch creates a deadly overlap.

Each collision means an insurance claim — for vehicle damage, medical injuries, or even total loss. The more frequent these claims become, the more strain is placed on insurers, and once again, that cost is passed back to consumers.

How Small Changes Create Big Insurance Ripples

It might seem surprising that a one-hour change could have such widespread consequences. But insurance is a game of numbers, and the industry measures everything in risk and probability.

Every time loss frequency rises — even temporarily — insurers adjust their pricing models to reflect the increased risk. That’s why something as seemingly trivial as Daylight Saving Time can influence auto insurance rates nationwide.

The increase may not show up as an immediate surcharge after every clock change, but over time, it becomes embedded in broader actuarial trends that shape long-term premium levels.

In other words, you’re paying for the collective fatigue of millions of drivers adjusting to the clock — even if you personally navigate the change just fine.

The Health Insurance Angle: A 24% Spike in Heart Attacks

Daylight Saving Time doesn’t just impact auto insurance — it also affects health insurance.

Susman cites studies showing a 24% increase in heart attack hospital visits in the week after the time shift. Doctors and researchers have long associated sleep disruption with spikes in cardiovascular events, and DST provides a natural experiment in just how fragile our biological systems can be when deprived of rest.

From an insurance perspective, that means more claims, more payouts, and eventually higher costs. Health insurers are forced to account for these predictable, recurring spikes — which again, cascade into overall premium calculations.

The Irony of It All

Perhaps the most absurd part of all this is that despite decades of debate, there’s still no definitive modern reason to continue the practice.

The supposed benefits — saving energy, improving productivity, maximizing daylight — have largely been debunked. Yet, every year, millions of people lose sleep, and society absorbs measurable costs: increased accidents, hospitalizations, and yes, higher insurance premiums.

Susman captures the irony perfectly: “You are literally paying higher insurance premiums for the benefit of shifting your clock.”

When you look at it that way, Daylight Saving Time feels less like a harmless tradition and more like a policy relic that keeps costing consumers real money.

The One Silver Lining: Fewer Robberies

To end on a lighter note, there’s one category of insurance claim that actually decreases after the time change — robberies.

Data shows a 7% decline in robberies immediately following the shift. The reason? Longer daylight hours in the evening temporarily reduce the cover of darkness that criminals prefer.

So while car crashes, heart attacks, and deer collisions all go up, at least one form of loss — property crime — goes down. Unfortunately, that small victory hardly offsets the broad economic and human costs associated with the time change.

What This Means for Policyholders

The broader lesson here is not just about clocks — it’s about how everyday events influence your insurance costs in ways most people never consider.

When insurers set rates, they rely on vast datasets capturing every pattern that can affect risk — from weather cycles to driving habits to time shifts. The Daylight Saving Time effect is just one example of how interconnected modern life and risk truly are.

For consumers, that means being aware of when risk levels spike — and taking practical precautions:

• Be extra cautious during the first week after a time change.
• Avoid long drives right after the shift if you’re sleep-deprived.
• Watch for wildlife during early morning and evening commutes.
• Give yourself a few days to adjust your sleep schedule before the change.

Small adjustments in behavior can make a measurable difference — not just for safety, but for keeping collective insurance costs down.

Should We Finally End Daylight Saving Time?

Susman concludes with a plea that echoes what many Americans feel: Let’s pick one time and stick with it.

The insurance data alone makes a compelling case. Eliminating the biannual time change could prevent hundreds of deaths, thousands of accidents, and countless medical emergencies — all while reducing insurance claims and saving consumers money.

From an insurance perspective, the math is simple: fewer accidents equal fewer claims. Fewer claims equal lower premiums. Ending Daylight Saving Time could literally make the roads safer and your insurance more affordable.

Until that happens, the next time you adjust your clocks, remember this: that single lost hour isn’t just costing you sleep — it’s costing you money.