What’s the Economic Impact of a Car Accident?
The emotional and physical impact of car accidents is clear: every year, millions of victims are seriously injured or even killed in car accidents around the world. It’s a devastating reality, and families worldwide are suffering as a result.
But their suffering occurs in more ways than just physical and emotional pain. Car accidents also have a huge economic impact, costing a trillion dollars per year, and families of the victims are often left to pay the bill. Road crashes affect the economy in many significant ways.
By the Numbers
To understand what car accidents cost us, it’s important to look at some of the numbers first. Each year, there are 11.3 million car accidents leading to 2.4 million injuries and 40,000 deaths. With damaged cars, injuries, and death comes vehicle repair or replacement costs, medical bills for both physical and emotional health, and funeral expenses.
As a result, United States citizens and institutions spend $871 billion each year after experiencing car accidents. Unfortunately, the largest costs come from loss of life and lifelong injuries that affect a person’s quality of life, accounting for $594 billion.
Economic Impact Broken Down
The largest factors contributing to the massive $871 billion spent each year include:
Productivity and Wage Losses: Employees can lose wages as a result of a serious injury or death in the family. Many businesses must also give their employees paid time off, which is lost money for them. This costs the economy $58.2 billion.
Legal and Court Fees: For those who are in a car accident that wasn’t their fault, they have the option to sue for compensation to cover personal injuries sustained during the accident, insurance coverage problems, and vehicle damages. This is a huge relief for the victims, but the economic impact increases for legal and court fees associated with such a lawsuit and can amass nearly $11 billion per year.
Employer Costs: Alongside the costs of lost productivity, employers also experience an increase in their insurance rates. If the car accident occurred while an employee was driving a company vehicle, they’re expected to pay all the expenses as well. Employers pay out around $8 billion per year.
Property Damage: Repairing or replacing vehicles, and sometimes the valuable items inside (such as a phone or laptop), reaches about $76 billion each year.
Medical and Rehabilitation Expenses: Around $23.3 billion goes towards bills associated with medical care and rehabilitation services for serious injuries. Many car accident victims also experience PTSD, depression, anxiety, or other mental health problems that require costly counseling services.
Emergency Services: It’s expensive to dispatch ambulances and Life Flight with their experienced drivers, pilots, and paramedics on board. Fire trucks, police officers, and other emergency personnel are also an expensive, but necessary cost. This costs about a billion dollars.
Insurance Administrative Costs: Medical and vehicle insurance companies must pay out a large sum any time there’s an accident. There are also higher costs associated if the insurance company refuses to pay or makes inadequate reparations, resulting in a lawsuit.
Traffic Congestion: The traffic jams caused by car accidents are worth a surprising $28 billion. This number includes the costs of fuel for idling vehicles, police officers at the scene, equipment to direct traffic, productivity losses, and more.
Most Expensive Accidents
Some accident causes are more dangerous than others. They cause more injuries and damage, and therefore have a larger economic impact. Some of the most expensive car accidents include:
Drunk Driving: Crashes with a drunk driver cost the nation $49 billion, which accounts for 18 percent of the total economic loss. Fatality rates and serious injuries are higher when there’s a drunk driver involved, increasing medical costs. There are also more police officers and jail expenses for the guilty party. Add on vehicle repairs and potential attorney fees, and you have the most expensive car accidents in the U.S.
Speeding: The second-leading cause of accidents worldwide, speeding costs U.S. citizens $59 billion annually, accounting for 21 percent of the total economic loss. Along with the hefty number of accidents, there’s also the cost of highway patrol and speeding tickets.
Distracted Driving: Thanks to cell phones, distracted driving has become the number one cause of accidents in the United States, accounting for 17 percent of the total economic loss and $46 billion. Accidents in distracted driving cases are severe and result in serious injuries and fatalities with a huge cost in more ways than one.
Pedestrians and Bicyclists: Unfortunately, pedestrians and cyclists are not safe on our roadways. The impact of their injuries is devastating, and it comes with a $19 billion price tag associated with medical costs, property damage, personal injury lawsuits, and more.
In conclusion, vehicle accidents are not cheap. Every citizen, regardless of whether or not they’ve experienced an automobile accident, is paying for car accidents in taxes and inflation. Adopting safer driving practices will save your life and your pocketbook.