The Real Cost of Road Crashes

The most devastating factor of any motor vehicle crash is injury to, and loss of, human life. While each case alone causes immeasurable pain and suffering, collectively, they contribute to an additional problem: a mounting financial drain imposed upon society and the economy. In 2010, the United States incurred a cost of USD $871 billion from motor vehicle collisions, according to statistics from the TSR White Paper “Investing in Road Safety: A Global Imperative for the Private Sector,” released in 2015. Without steps to improve auto safety, this figure will continue to drain resources.

Developing countries

Developing countries typically lack long-term data or statistics; however, the World Health Organization estimates that the cost of road crashes represents 3 percent of a country’s gross national product, with that figure closer to 5 percent in low- and middle-income countries.

Regions already prone to poverty are hard hit by incident-incurred costs. Affected families are left struggling to regain lost income, and often suffer a secondary loss of income if another adult must cease working to care for either the injured or young children suddenly without a caregiver. Even a collision that poses no human harm, yet damages or destroys the vehicle used for work transport, creates financial hardship. Finally, additional societal costs are incurred by emergency response, medical care, and follow-up investigation.

In the United States

Statistics from crashes within the United States are attainable and can be used as a global learning tool. According to the White Paper, the $871 billion in costs related to auto crashes in 2010 stems from two main areas:

Direct costs, which totaled USD $242 billion, further broken down as follows:

• 28 percent property damage
• 25 percent lost workplace productivity
• 8 percent lost household productivity
• 39 percent medical costs, costs due to traffic congestion, and miscellaneous other costs

Intangible costs, representing the remainder, further broken down as follows:

• 68 percent quality of life losses – such as pain, suffering, and disability
• 32 percent economic losses – financial loss and damage suffered

Costs to employers

Employers incur a high cost for employee auto crashes and fatalities. In the United States, approximately 2,100 employees die each year, and 353,000 are injured in motor vehicle crashes on the job, according to the White Paper. Highest risk industries include agriculture and forestry, land transportation, mining, heavy construction, and automotive sales and repair.

A 2003 report from the U.S. National Highway Traffic Safety Administration, “The Economic Burden of Traffic Crashes on Employers,” estimates that, between 1998 and 2000, motor vehicle crashes cost employers nearly USD $60 billion per year. This includes (in USD):

• $41.5 billion in fringe and non-fringe benefits and $18.4 billion in wage-risk premiums
• $3.8 million per employee death, including $500,000 in fringe and non-fringe benefits, and $3.3 million in wage-risk premiums
• $128,000 per non-fatal injury, including $76,000 in fringe and non-fringe benefits and $52,000 in wage-risk premiums

The tragedy and devastation stemming from auto collisions is reason alone to improve road safety. But on top of that, the mounting financial burden further emphasizes the need for a global, collaborative response to reduce collision-related costs and statistics.