Motor Vehicle Accidents in Workers Compensation - An Update

INTRODUCTION

This is an update to NCCI’s 2018 research brief titled “Motor Vehicle Accidents in Workers Compensation,” which examined the frequency and severity of motor vehicle accidents (MVA) from 2000 to 2016. The brief noted that frequency decreased for both MVAs and all claims from 2000 to 2011. However, a key finding was that from 2011 to 2016, while the frequency of all workers compensation (WC) claims continued to decrease, the frequency of MVAs increased in both WC and in the general population. We cited the rapid expansion of smartphone ownership during this period as a possible contributing factor.

This article provides an update of MVA experience in WC through Accident Year 2018 and discusses factors influencing MVAs, such as cell phone laws and ownership, and vehicle safety. The article also sheds light on how the COVID-19 pandemic may impact 2020.

KEY FINDINGS

  • MVA frequency increased. From 2011 to 2018, the frequency of MVA lost-time claims increased, while the frequency of all lost-time claims decreased. Our previous research showed that the same was true for the period 2011 to 2016.
  • Smartphone ownership over 80%. Smartphone ownership skyrocketed after the introduction of the iPhone in 2007, but growth has tapered off in recent years. As of year-end 2018, the percentage of US adults who own a smartphone is estimated to be over 80%.
  • Safety evolves. State-of-the-art vehicle safety features, such as automatic emergency braking, will take time to penetrate the driving pool, as the average car age is just under 12 years.
  • MVA claim severity. MVA lost-time claims continue to cost over 80% more than the average lost-time claim, because MVA claims tend to involve severe injuries (e.g., head, neck, and spine).

OVERVIEW

The source of data for this study is Statistical Plan data for NCCI states.1 This database contains detailed policy information, which allows us to analyze WC frequency and severity by various claim characteristics.2 We define the following terms:

  • Motor Vehicle Accidents—Accidents involving cars, trucks, buses, and motorcycles, but excluding those involving boats, trains, or planes; the associated injuries may be to an occupant of a vehicle or to a person or cyclist struck by a vehicle3
  • Frequency—Lost-time claims per million dollars of earned premium4,5,6
  • Severity—Average cost per lost-time claim7

The findings in this report are based solely on data for lost-time claims (excluding medical-only claims).

MVA VERSUS ALL-CLAIM FREQUENCY

WC has experienced a long-term decline in overall claim frequency. Since 2000, the only notable increase in claim frequency across all NCCI states combined occurred in 2010, following a larger-than-usual decline during the Great Recession.8 Subsequent to 2010, frequency resumed its long-term decline. For WC MVA claims, the story is quite different.

The exhibit below displays the cumulative change in the frequency of all claims versus MVA claims for Exposure-Accident Years (EAYs) 2011–2018, indexed to EAY 2011. Over this time period, the frequency of all claims declined by more than 20%, while the frequency of MVA claims increased by nearly 5.0%.

Lost-Time Claim Frequency of Motor Vehicle Accidents Versus All Claims

Graphic 1

The exhibit below displays the Top 15 MVA classification codes ranked by the share of MVA claims over the period 2011 through 2018. Average annual changes in claim frequency are shown for (i) all claims, and (ii) MVAs alone. We observe the following over the study period:

  • The Top 15 classes accounted for 47% of all MVA claims
  • The trucking class (7219) accounted for 13% of all MVA claims
  • For 11 of the Top 15 classes, MVA frequency increased
  • For 14 of the Top 15 classes, the change in MVA frequency was greater than that for all claims

Top 15 Class Codes: Changes in Lost-Time Claim Frequency
Exposure-Accident Years 2011–2018

Graphic 2

The exhibit below provides a summary across all class codes. Note that the Top 30 classes account for 60% of all MVA claims.

Summary of Class Code Changes in Lost-Time Claim Frequency by Share of MVA Claims
Exposure-Accident Years 2011–2018

Graphic 3

In the most recent years, MVA frequency has showed signs of leveling off. Let us investigate a few factors that may be having an influence.

SMARTPHONE OWNERSHIP

In our 2018 research, we noted the rapid growth in smartphone ownership following the introduction of Apple’s iPhone in 2007. From year-end 2007 to year-end 2016, the smartphone share of all cell phones increased from 6% to 81%.9 Based on more recent information, we estimate that the smartphone share of all cell phones has grown only modestly to 84% as of year-end 2018. It is possible that the share of drivers who own a smartphone may be nearing a saturation point.

There is a notable disparity in smartphone ownership between younger and older drivers. Nearly all drivers under age 30, but only half of drivers over age 65, own a smartphone.6 This suggests that smartphone ownership among employed drivers may creep further upward as younger individuals enter the workforce and older workers retire. However, since the vast majority of drivers now own smartphones, we may not see the same MVA frequency increases that occurred during the period when smartphone ownership was significantly increasing.

Greater use of cell phone blocking technology would also be expected to make driving safer, if enabled by the driver. This technology, available through smartphone apps, prohibits calls or texts while the vehicle is in motion. Alternatively, Bluetooth technology allows for hands-free communication while driving.

Several factors that may put downward pressure on MVA claim frequency include (i) stricter state cell phone laws, and (ii) vehicle safety improvements. We will consider each of these in turn.

STATE CELL PHONE LAWS

According to the Insurance Institute for Highway Safety (IIHS), texting while driving is prohibited in 48 states and the District of Columbia (DC). While no state bans all cell phone use while driving, 38 states and DC ban all cell phone use by teenage drivers, and 21 states and DC prohibit all cell phone use for school bus drivers. Fewer than half of the states currently ban handheld cell phone use.10 Penalties for texting while driving vary considerably by state, ranging from small monetary fines to jail time—and may include points against a driver’s license.

Enforcement of cell phone laws is now primary in most jurisdictions, which means that a police officer can ticket a driver for that offense alone. Under a secondary enforcement law, an officer can only ticket a driver for violating the cell phone law if the violation is observed while committing a separate traffic infraction.

Will stiffer enforcement and penalties serve as successful deterrents to distracted driving? The evidence shows some promise. A study of 16 states that enacted texting bans found “an average 4 percent annual reduction in emergency room visits for motor vehicle crash injuries compared to before the ban.”11 Another study found that “primarily enforced laws banning all drivers from texting were significantly associated with a 3% reduction in traffic fatalities in all age groups.”12 However, despite the state laws, a February 2019 survey of more than 1,400 drivers revealed that 88% use their smartphone while driving and more than 68% text while driving. The same survey also reported that 94% of drivers would support a ban on texting while driving.13

VEHICLE SAFETY IMPROVEMENTS

New cars in the United States come equipped with a variety of standard safety features (e.g., airbags, electronic stability control (ESB), tire pressure monitoring display, LATCH child safety seats, and backup cameras). Automakers continue to make great strides in improving motor vehicle safety through cutting-edge technologies offered as options on many vehicles (e.g., automatic braking, adaptive cruise control, lane keeping assists, and collision warnings).14 In addition, technology is available in many vehicles to detect pedestrians.

According to the National Highway Traffic Safety Administration (NHTSA) “the installation of automatic emergency braking (AEB) is part of a voluntary commitment by 20 automakers to equip virtually all new passenger vehicles with low-speed AEB that includes forward collision warning by September 1, 2022.”15 The NHTSA further noted that “manufacturers have made great strides in providing advanced safety to consumers compared to just two years ago, when only 30% of their new vehicles were equipped with AEB.” The IIHS maintains that autobraking is making driving safer, estimating that the technology could cut rear-end collisions in half.16

However, it will take time for the full spectrum of safety features to penetrate the vehicle pool. According to the US Department of Transportation, only 6% of cars on the road are estimated to be less than one-year old. Over the past 25 years, the average age of cars/light trucks on the road has steadily increased from approximately 8.5 years (1995) to almost 12 years (2019). This has been primarily due to a combination of improved reliability and rising new car/truck prices.17

MVA SEVERITY

Motor vehicle accidents often involve very serious injuries that can take their toll on injured workers and their families. From EAY 2000 to 2018, the average cost of an MVA claim was more than 80% higher than that for all claims combined. Refer to our 2018 research for more detailed information on MVA claim severity.

COVID-19 PANDEMIC

At this time, the actual impact of the COVID-19 pandemic is not yet known, although several consequences of the pandemic may be expected to impact MVA claim frequency in 2020.

The pandemic has led to reduced work-related driving exposure and reduced business travel. More employees are telecommuting, with “up to half of American workers currently working from home, more than double the fraction who worked from home (at least occasionally) in 2017–18.”18 In addition, industries such as busing and taxicabs (that have a relatively high volume of MVAs) have experienced a significant decline in demand due to the crisis.

NCCI will continue to monitor the situation and report our findings once additional data becomes available.

CLOSING REMARKS

MVA frequency has generally risen since 2011, but is showing signs of leveling off; simultaneously, smartphones have nearly saturated the driving pool. Several promising factors may lessen further increases in MVA frequency. These include stricter state laws on texting and driving, vehicle safety improvements, and increased awareness of the dangers of distracted driving. NCCI will continue to monitor trends in MVAs closely and share our findings.

​This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.

1 States where NCCI is a licensed workers compensation rating or advisory organization.
2 We have elected to include large deductible (LD) policies in order to maximize the number of MVA claims under review.
3 Ridesharing drivers are not considered employees and are not covered by WC in NCCI states.
4 Reported, undeveloped lost-time claims at 1st report per million dollars of earned premium, on-leveled to NCCI approved pure loss cost level by state and adjusted for changes in average weekly wages by state.
5 1st report for each policy is 18 months from the policy effective date. Earned Premium is on an “exposure year” basis in that audited payroll (at 1st report) for each policy is spread to the appropriate calendar year (CY). Earned Premium is on-leveled by extending payroll for each year by the approved NCCI pure loss costs by state.
6 Source of average weekly wages by state: US Bureau of Labor Statistics: Quarterly Census of Employment and Wages.
7 Reported, undeveloped average cost per lost-time claim (paid losses and case reserves) at 1st report.
8 The Great Recession spanned December 2007 through June 2009, according to the National Bureau of Economic Research.
9 Source: “Smartphone Penetration of Mobile Phone Market,” Comscore MobiLens®.
10 Source: “Cellular Phone Use and Texting While Driving Laws,” National Conference of State Legislators podcast, May 29, 2019.
11 Source: “Bans on texting while driving tied to drop in ER visits for crash injuries” by Lisa Rappaport; Health News, April 3, 2019.
12 Source: “Impact of Texting Laws on Motor Vehicular Fatalities in the United States,” Aug 2014; by A. Ferdinand, N. Menachemi, B. Sen, J. Blackburn, M. Morissey, L. Nelson.
13 Source: “Why Cell Phone Deaths are on the Rise in America,” Texting and Driving Statistics, 2019 Survey, Simply Insurance.
14 Source: “Cars With Advanced Safety Systems,” Consumer Reports, January 22, 2020.
15 Source: “NHTSA Announces Update to Historic AEB Commitment by 20 Auto Manufacturers,” NHTSA, December 19, 2019.
16 Source: “Autobraking tech will be standard in cars by 2022, but drivers complain of phantom breaking.” CBS News, October 24, 2019.
17 Source: “By the Numbers: Average Age of American Cars Higher Than Ever” by James Gilboy; The Drive, October 9, 2018.
18 Source: “Telecommuting will likely continue long after the pandemic” by Katherine Guyot and Isabel V. Sawhill; BROOKINGS, April 6, 2020.







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