Car Crashes Accounted for $474 Billion of Damage in 2020 Alone
With so many people working from home and staying in this past year, you’d think that the human and financial loss from car accidents would have dropped from the year before. Not so. Fatalities caused by car accidents actually increased in 2020 compared to 2019.
The Insurance Information Institute (III) reports that an estimated 42,060 people died from car accidents in 2020, up 8% from the year before. The financial toll from car accidents rose 2.3%, from $463 billion to $474 billion.
Take a closer look at these numbers, learn what experts think caused the increase, and see how it illustrates the importance of car insurance below.
Car crashes are both stressful and costly | Twenty20
The cost of car accidents in 2020
The National Safety Council’s (NSC) $474 billion estimate from 2020 comprises all the financial costs of a car accident—from deaths, injuries, and property damage. The year’s increase ended a three-year streak of decreases that began in 2017.
And make no mistake, you didn’t imagine the year’s decrease in traffic. Vehicle miles traveled fell about 14.5% in 2020. The decrease in miles traveled coupled with the increase in fatalities caused a 24% spike in the death rate based on mileage, the highest annual increase the NSC has recorded in 96 years.
What caused the increase in car accident deaths in 2020?
These numbers might seem confusing. How could more people die while driving with fewer people on the road? A closer look at property damage claims gives a likely answer.
Chief Actuary of III, James Lynch, points out that in 2020 the frequency of property damage insurance claims decreased by 30% from 2019, but the severity of claims increased by 20%.
Lynch says speed was likely the cause of the increase and that drivers aren’t showing any signs of slowing down as traffic numbers return to normal.
“The concern,” he says, “is that frequency patterns will return to the norm, but fast driving will keep claim severity high.”
The impact of the speeding trend on your car insurance
Speeding is never a good idea. Never mind the danger you put yourself and everyone around you into, the damage it can cause to your pocketbook through accidents and tickets amplifies as those driving-record dings and insurance claims affect your premiums.
But the fast-driving trend might also raise your car insurance rates, even if you don’t participate in it. The increase in accident severity increases the risk of driving for everyone. That will inevitably force insurers to charge more to cover all drivers.
At the same time, it highlights the necessity for you to have the proper insurance. The faster people around you are driving, the more likely you will have accidents and need insurance to cover you for any damages that result from them.
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