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The Hidden Cost of Roadway Crashes: Economic Impacts and Who Pays

Motor vehicle crashes are a major problem in America. More than 35,000 people died in collisions in 2015 alone, according to the Insurance Institute for Highway Safety. In addition to the terrible loss of life, these crashes are costly. The estimated economic impact of these accidents is almost $250 billion annually, according to the U.S. Department of Transportation.

When these potentially avoidable automobile crashes occur, everyone pays. From individual crash victims and innocent bystanders to private insurers and municipalities, the estimated cost of just one traffic fatality is almost $1.5 million when lost productivity, administrative costs, property damage and unrecoverable expenses are factored in, according to the National Safety Council. In addition to the heartbreaking toll that fatal vehicle crashes take on loved ones, the financial burdens – most of which come from work-loss issues related to the victim’s family – can be crippling.

Companies like Redflex partner with municipalities to provide traffic safety solutions that change driving behaviors and make communities safer. So what are some common types of crashes and how can they be prevented?

Non-Injury Crashes

Almost 75 percent of all automobile crashes are non-injury crashes, colloquially known as “fender benders,” according to the Injury Claim Coach. While these more minor accidents don’t result in injuries or loss of life, they are still extremely costly. USA Coverage reports that 75 percent of the 5.25 million car crashes that occur each year cost approximately $9,056,250,000.

Red-Light Running

Crashes that result from illegally running red lights can be very deadly, but they are also extremely avoidable when drivers follow traffic signals. More than 900 people die annually and nearly 2,000 people are injured as a result of vehicles running red lights, according to the Rocky Mountain Insurance Information Association. In fact, about half of those deaths are pedestrians and occupants of other vehicles who are hit by red-light runners. These fatal crashes cause approximately $3,697,170,000 in expenses annually due to deaths and injuries, not even accounting for property damage of non-injury accidents, reports Get Me Justice.

T-Bone Crashes

Side-impact or “t-bone” crashes are the deadliest type of automobile crashes. Over the past 20 years, deaths caused by side-impact crashes have risen by 20 percent because of increased travel speeds and a greater number of large vehicles, such as SUVs, according to Accident Values. There are about 3.18 million t-bone crashes every year that cause approximately 9,400 deaths. The fatalities associated with t-bone crashes alone result in $38.5 billion in costs annually.

So who pays for all of these high-cost crashes?

People not directly involved in a crash pay an estimated 75 percent of crash-related expenses, usually through insurance premiums, taxes and delays in travel. Private insurers pay about 50 percent of accident-related costs, while individuals involved in the crash pay about 26 percent. Third-parties, like uninvolved drivers and health care providers, pay around 14 percent, while federal funds pay 6 percent. State and local municipalities pay about 3 percent. It is clear that the economic impact of these types of crashes can be significant and wide-ranging.

Communities all over North America are taking action to reduce these crashes for the benefit of all. Redflex has introduced a variety of technology solutions, such as red-light enforcement, speed enforcement, school bus stop-arm enforcement, other specialty solutions and intelligent traffic systems. These solutions provide municipalities the right tools and resources to keep these types of crashes from happening.

From deterring poor driving habits such as not obeying speed limits or posted traffic signals, to using smart technology to preempt a crash, the next generation of roadway technology is not only making roadways safer, but it is keeping money in the pockets of citizens and municipalities.