QUANTIFYING THE RISK, COST OF DISTRACTED DRIVING

The following information was released by Florida State University:

By: Melanie Yeager | Published: September 19, 2025 | 9:10 am | SHARE:

Despite all the advances in automotive safety and driver assistance, traffic deaths nationwide still exceed 40,000 a year. Distracted driving, such as texting behind the wheel, clearly contributes to these fatal outcomes. But what is the risk and financial cost?

Ongoing research by Florida State University College of Business faculty members in the Dr. William T. Hold/The Alliance's Program in Risk Management and Insurance yields insights that help inform markets and public policymakers.

"There's a real economic cost to this," said Brad Karl, State Farm Professor of Risk Management and Insurance and director of research for FSU's Risk Management and Insurance Center. Much research has been done on the harmful aspects of distracted driving, but far fewer studies have tackled the financial implications, Karl said.

The body of research on distracted driving supports the logical assumption that legal measures to lessen distracted driving bring about improved driver behavior, which reduces the risk of car accidents. Safety advocates have long used these findings to champion policy and legislation: Nearly every state in the nation now bans texting while driving.

Karl, along with co-author Charles Nyce, the Dr. William T. Hold Professor of Risk Management and Insurance, took these findings further, determining what these bans and behaviors would mean monetarily for the average driver or insurance company. Their findings, published in the "Journal of Risk and Insurance" and the "North American Actuarial Journal," determined that a state ban on hand-held cellphones while driving trimmed incurred auto insurers' losses and incurred loss ratios by 3% and incrementally decreased the cost of insurance premiums. They also found that states with these bans shaved 7.7% off the average cost per insured vehicle, which added up to tens of millions of dollars in average savings to each state.

"We took the approach of examining the frequency and costs of insurance claims, focusing on the bans' effects on the auto liability market specifically," said Nyce, who also chairs FSU's Department of Risk Management/Insurance, Real Estate and Legal Studies and serves as interim executive director of the FSU Risk Management and Insurance Center. "We knew our new perspective could be beneficial to regulators and policymakers as well as the insurance industry.

More recently, Karl and Nyce approached the topic from another angle: How risky is distracted driving? They, along with researchers Lawrence Powell and Boyi Zhuang of the University of Alabama, further analyzed data from the National Highway Traffic Safety Administration's Fatality Analysis Reporting System (FARS), which keeps account of every fatal vehicle accident nationwide.

Among their findings published in the "Journal of Risk and Uncertainty:"

Distracted drivers are three times more likely than focused drivers to cause a fatal crash

About 3-4% of drivers at any given time are distracted drivers

Distractions related to cell phone use are less likely to cause fatalities than other sources, such as "eating, passengers, insects and reptiles, and other electronics"

The external cost of distracted driving leading to fatalities is 2 to 5 cents per mile

All distracted drivers should be paying an additional $577 per year to account for the extra risk cost

New knowledge for better business decisions

Karl said most academic researchers, like himself, take great care to avoid delivering opinions along with their findings.

"Our job is not to determine whether the law is necessary or not," Karl said. "But we can provide quantitative answers to key questions used to make these kinds of decisions."

He does hope his work is making a difference.

"I never want to do academic research for the sake of academics," Karl said. "I've always been interested in regulation and what are the consequences and costs of regulation. I have explored that for most of my career in the context of insurance markets."

He points out that in addition to the tragic toll of lives lost, auto fatalities negatively affect insurance costs. "We try to quantify those costs in the best way we can," he said.

Karl cautions that their findings cover a specific time span and that results will change as devices and people evolve. For instance, he said, their most recently published article on distracted driving risk examined traffic fatality data from 2000 through 2018.

"I don't think there are a lot more people using cell phones these days," Karl said. "But just think about how many more apps and other new opportunities people have to be distracted on their phones since then. It seems reasonable that there is a higher level of distraction in 2025."

Karl and Nyce, along with Patricia Born, the Payne H. and Charlotte Hodges Midyette Eminent Scholar in Risk Management and Insurance and doctoral program RMI coordinator, continue to contribute findings relevant to the auto insurance industry. Recent studies co-authored by one or more of them include:

Assessing the Risk of Fatal Traffic Accidents from Cannabis-Impaired Driving

Who are the Dangerous Drivers? Addressing Sample Selection Bias with New Estimates

Availability of the Seat Belt Defense: Implications for Auto Liability Insurance

How Risky is Distracted Driving?

No-Fault Auto Insurance Reform in Michigan: An Initial Assessment Revised

The Effect of Distracted Driving Laws on Automobile Liability Insurance Claims

How Cellphone Bans Affect Automobile Insurance Markets

The FSU RMI faculty is ranked No. 6 globally for its prolific and impactful research published in leading journals, according to the University of Nebraska-Lincoln Global Research Rankings of Actuarial Science and Risk Management and Insurance. Visit business.fsu.edu/rmi to learn more about the Dr. William T. Hold/The Alliance's Program in Risk Management and Insurance.