Workers’ Compensation Insurers Face Rise in Motor Vehicle Accidents

Although there has been an overall decline in workers’ compensation claims, the frequency of claims for motor vehicle accidents has increased in recent years.

According to the National Council on Compensation Insurance (NCCI) in a new report, these accidents can be very severe and are responsible for a significant portion of fatal workers’ compensation claims.

“While workers compensation claims have been declining, motor vehicle accidents have been on the rise over the last five years,” said Jim Davis, author of the paper and NCCI director and actuary. “These often involve very serious injuries that can take their toll on injured workers and their families.”

NCCI actuaries found that from 2011 to 2016, the frequency of all claims declined by 17.6 percent, while the frequency of motor vehicle accident claims increased by five percent.

Additionally, 41 percent of fatal workers’ compensation claims were the result of a motor vehicle.

According to the workers’ compensation rating organization, motor vehicle accident claims cost 80 percent to 100 percent more than the average claim because they involve severe injuries. These claims also tend to represent a higher share of the costliest claims. Over a five-year period, motor vehicle claims accounted for 28 percent of workers’ compensation claims above $500,000, versus just five percent of all claims.

While numerous factors may explain the rise in accidents, the NCCI report notes that it is “striking how the increasing popularity and use of smartphones coincides with this growing trend” of motor vehicle accidents. By the end of 2010, approximately 27 percent of all cell phones were smartphones but by the end of 2016, that figure had tripled to 81 percent, the report notes.

Bill Donnell, president and CEO of NCCI, said this points to distracted driving as a key contributing factor.

“It’s time for all stakeholders to better understand and work together to address this important societal issue,” Donnell said.

The increase in motor vehicle accidents is not limited to workers’ compensation. NCCI found a similar pattern in the general population, with accidents generally increasing over the same time period, along with an increase in the number of traffic accident fatalities.

Over the same period that motor vehicle accidents increased, smartphone use grew. According to the National Safety Council, a minimum of 27 percent of crashes involve drivers talking and texting on their phones. However, that report also states that driver cell phone use is likely highly underreported and, therefore, substantially underestimated.