How much do crashes cost us?

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The National Highway Traffic Safety Administration has been busy data-mining. It has been analyzing all the data of crashes during 2010 to provide some understanding of the total cost to America. To remind you, in 2010:

• 32,999 people were killed (25% of these crashes were not reported to the police which is alarming);
• 3.9 million people were injured;
• 24 million vehicles were damaged.

Now the temptation is to think purely of the individuals injured and their families, but the reality of the effects is more widespread. To list all the costs would take too long. Here are the major factors the NHTSA can put numbers to:

• car insurance rate rises and administration costs;
• congestion costs;
• the cost of running the emergency services including police, fire and medical;
• legal and court costs;
• medical costs including deductibles and co-payments;
• physical damage to property;
• productivity losses and the general costs to employers in replacing injured or dead employees;
• rehabilitation and physical therapy costs.

Then there are all the costs it is difficult to value — the so-called intangible losses:

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• the consequential losses, e.g. modifying the home to cope with wheelchair access or other forms of disability;
• the diversion of medical resources away from those who fall ill or suffer disorders, leading to delays in their treatment;
• loss of productivity in the home, e.g. wife and mother no longer available to do the usual work;
• the physical pain and suffering not only of those who are injured and killed, but also their families;
• the lost quality of life with people who have long-term disabilities.

The NHTSA estimates the total economic cost to be $277 billion. That’s almost 2% of the gross domestic product and about $900 for every person currently living in America. If you come down to the individual family unit, the average loss is $1.4 million (this despite many families having life insurance in force). Looking generally, private insurers cover about 52% of all losses for both families and employers. In turn, that means the employer commercial rates and the private car insurance rates rise. All the other costs are born by the surviving individuals, the families, government, both federal and state, and charities. That actually means the costs fall on every citizen both as taxpayers and generous givers to charity.

When you add in the intangible costs, the total rises to $870 billion. This is largely based on the estimate of a value on the loss in quality of life, particularly in cases where individuals suffered long-term critical injuries. From this, you will understand, it’s more expensive to look after people who are merely injured. It would therefore be good in human and financial terms, to reduce deaths and injuries. Now consider that alcohol was a cause of 21% of the economic costs, speeding caused 21% of the costs, distracted driving caused 17% of the costs. Just think how much we would save if we stopped drunk driving, slowed down, and stopped texting while driving. America would be a better, safer place to live.

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