- The Financial Impact of Vehicle Crashes
- January 19, 2018 | Author: Herbert Louthian
- Law Firm: Louthian Law Firm, P.A. - Columbia Office
Computing the Physical Losses
One of the most significant expenses arising from a car crash is medical care, which is actually increasing faster than the rate of injuries. Even though injury severity shrinks a little each year due to improved vehicle safety systems, the amount spent and claimed for medical injuries continues to inch upwards. According to the Rocky Mountain Insurance Information Association (RMIIA) the average claim for bodily injury was $15,443 for car accidents in 2013, while claims for property damage averaged $3,231.
One variable of computing medical expenses is the influence of both short-term and long-term costs. Short-term expenses are immediate, such as emergency treatment and associated costs during recovery. Long-term costs involve rehabilitation, occupational and physical therapy, psychological counseling if needed, and other extended recovery-based treatment.
The average economic losses arising from an auto accident differ widely and depend on injuries (and severity) sustained. The average total cost of a fatal car accident, according to a 2011 study by the American Automobile Association (AAA), was $6 million for all economic and non-economic damages. Yet from an identical non-fatal accident, total costs plummeted to $126,000.
The problem with trying to determine a median cost of vehicle accident damage is the wide variety of incidents, locations and collision types. The average medical expenses from a minor accident were a little over $2,700 in 2010, according to the NHTSA. The mean wage loss in these crashes was $2,661 per victim, and the loss of household productivity was $860.
Finding Median Value
For severe accidents, however, mean medical expenses were $503,638, wage loss was $439,191, and lost productivity was $119,759. And though the numbers can modestly vary, you can get a general idea of the costs accident victims often face.
Types of injuries also have a marked impact on average costs of a car accident. Between 2008 and 2010, a severe spinal injury had an average medical cost of $992,867, compared to a $1,564 mean medical cost for the mildest upper extremity injuries. Mean medical costs for traumatic brain injury (TBI) varied from $3,977 for a mild injury to $408,684 for the most severe.
Generally, severe spinal cord and head trauma are the most expensive car crash injuries and disproportionately impact a crash victim’s quality of life, mobility, independence and earning power. Patients who have suffered a TBI may, for example, face cognitive issues, memory loss, vision problems and personality changes. They may need surgery (sometimes more than one) plus rehabilitation. Sometimes, these victims cannot return to their previous jobs. Many may also need a lifetime of licensed healthcare. In short, auto crash victims who suffer from either severe brain injury or spinal cord injuries face high medical expenses, long-term costs and limited work opportunities.
Totaling up the Figures
In total, vehicle accidents have cumulatively cost the U.S. at least $871 billion annually for the last several years in economic damages, loss of productivity, and other social harm according to USA Today and the NHTSA. Of this total figure, $277 billion includes economic damages and $594 billion is the cost of “social harm” from highway accidents.
A fatal car accident in a city has an economic impact of about $6 million, including lost income, decreased productivity, economic damages, impact on quality of life and other costs. Over a lifetime, a single fatality has an economic cost of $1.4 million (so says NHTSA) for the economy, with more than 90% of this figure taken up by lost productivity (at work and home) and legal costs.
All these expenses can add up. Some of the economic and non-economic costs of car accidents in the U.S. in the 2010 mega-study included:
· $57.6 billion for lost workplace productivity
· $19.7 billion for lost household productivity
· $76.1 billion for property damage
· $23.4 billion for medical costs· $28 billion for costs related to extra fuel use, traffic congestion and environmental impact.