NHTSA Estimates Crash Cost To Americans

Secretary Peša: Motor Vehicle Crashes Cost America $150
Billion Each Year

Thursday, August 7, 1996

NHTSA 43-96
Contact: Barry McCahill
Tel. No. (202) 366-9550

Secretary of Transportation Federico Peša today released
a new study of the economic impact of motor vehicle crashes on the U.S.
economy, detailing a staggering $150.5 billion cost in 1994 alone.

“While one cannot measure in dollars the pain and anguish caused by
the loss or injury of loved ones, the annual economic impact of motor
vehicle crashes alone is the equivalent of $580 for every American,”
Secretary Peša said in a Washington, D.C., meeting with
businesses, safety experts and law enforcement officers. “We need every
driver to follow the rules of the road and all motorists to wear their
safety belts and make sure children are in properly installed child
safety seats.”

“President Clinton and I made transportation safety our top priority,
and there is progress to report, including reductions in drunken driving
and more safety belt use, but we must continue to do all we can to make
our highways safer,” Secretary PeÅ¡a said. “All of us have a
responsibility when it comes to highway safety and together we can meet
that challenge.”

Crash costs funded through public revenues cost taxpayers $13.8
billion in 1994, the equivalent of $144 taken from the taxes paid by
every household in the United States, according to the study conducted by
the National Highway Traffic Safety Administration.

According to the study, less than a third of crash costs are paid by
those involved in the crash. The remaining costs are spread among the
general population through insurance premiums (55 percent), public tax
revenues (9 percent), or other sources such as charities or medical
providers (7 percent). Public tax revenues pay for an even higher
portion, 24 percent, of first-year medical care costs.

Secretary Peša pointed out that crash costs are typically
thought of in terms of hospital bills, but medical care accounts for just
11 percent of the total cost. The biggest share of cost comes from
property damage, which accounts for 35 percent of the total. Although
property damage is a relatively small cost on a per-case basis, the sheer
volume of low speed crashes that involve no injury makes them a
significant economic cost. Other costs include lost productivity,
emergency services, legal and court expenses, insurance administration,
vocational rehabilitation, workplace costs, and travel delay.

Secretary Peša said that while the costs are staggering,
there is progress. He cited gains in the fight against drunk driving and
in safety belt and child seat use, and said that costs, if adjusted for
inflation, actually have declined since 1990.

He also noted the following found in the study:

The number of vehicle miles traveled rose by 9.5 percent since 1990,
but the rate of injury has declined during the same period. If fatality
and injury rates had remained at the higher 1990 levels, 1994 crash costs
would have been nearly $30 billion (or 20 percent) higher than the $150.5
billion that actually occurred.

Between 1990 and 1994, safety belt use rose from 49 percent to 67
percent, and the portion of fatalities that occurred in alcohol-involved
crashes dropped from 50 percent to 41 percent.

During the same time, there was a steady increase in the portion of
the vehicle fleet with improved safety features such as air bags, rear
seat lap/shoulder belts, and center high mounted brake lights.

The analysis, done by the department’s National Highway Traffic Safety
Administration, covered costs resulting from 40,716 deaths, 5.2 million
injuries, and 27 million damaged vehicles during the year.

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