How to Manage Your Financial Risks as a Driver

For convenience, nothing matches having your own car, but with more than 30 million deaths due to traffic accidents since the first documented crash fatality in 1899, and 2.3 million adult drivers and passengers treated in a single year in emergency departments for injuries sustained in car crashes,¹ driving is not without its dangers. While it is not possible to guarantee a lifetime of accident-free driving, there are some steps that can help you reduce the likelihood of facing either treatment or a lawsuit following a crash.

Drivers involved in a car accident may not want to admit it, but the simple fact is that many crashes are caused by driver error. Defensive driving courses have therefore been developed in order to teach drivers how to best handle their vehicles on the roads, and about the consequences of driving distractions. The contents of each course vary, but they cover a range of subjects including how to drive in different conditions, and what to do when things start to go wrong, such as if the brakes fail or the car loses traction. There are a number of programs available, including those that are state certified, which can lead to a discount on insurance as well as a reduction in driving license points, where applicable.

However, prevention is always better than cure and regular maintenance checks on your vehicle are a good way to help steer clear of accidents. A vehicle that is in tip-top condition and responsive is far more likely to be able to stop quickly. It is recommended to carry out routine checks on your vehicle before driving, especially for long distances. Oil, water, screen wash and tires are all components that are simple to check but could help to potentially save lives, yours included. Cars should also have a regular service, even if they have been sitting in the garage for most of the year. Some car parts degrade more with little use.

The type of vehicle being driven also makes a difference to the outcome of any collision, and motorists are increasingly demanding that the industry incorporates better safety features in their cars. In February 2010, 86% of Americans polled in a survey said that safety ranked highly in the list of important considerations when purchasing a new car, with just 2% saying it was not something they took notice of.²

There are two organizations in the U.S. that are responsible for carrying out tests to check for crashworthiness, with vehicles checked for their ability to withstand crashes of different types. Vehicle age is not the only variable considered; the make and model and type of vehicle is also taken into account. The insurance industry funds one set of tests, those performed by the Insurance Institute for Highway Safety (IIHS), whilst the US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) administers the other. Both sets of tests check rear, front and side impact crashes as well as low speed and rollover tests. Test results can be viewed online at safercar.gov.

Among the best safety features available on vehicles are airbags, a piece of equipment primarily designed to absorb impact in moderate to severe crashes occurring from the front. By 2009, an estimated 184 million vehicles were fitted with airbags, of which 175 million had dual airbags. The most effective combination of safety measures a car can provide to its passengers is seatbelts, plus front and side impact airbags. In crashes where side airbags were deployed, the incidence of driver fatalities fell by 37%.

Other factors recognized as playing a role in the incidence of crashes are poor driving habits such as frequent rapid acceleration and sharp braking. Insurers have realized that driving in this manner brings additional risks and some have introduced schemes designed to motivate better driving habits by providing discounts for good driving. In one scheme, the insured must consent to a device being attached to the car to monitor driving habits, including time of day the vehicle is primarily driven and miles travelled. Those who are able to demonstrate safe driving practices and low risk habits can obtain cheaper coverage. Unfortunately, those who are not the safest drivers will find they actually are asked to pay more by their insurer.

From 2012, vehicles are set to improve even further as the National Highway Traffic Safety Administration has sponsored legislation making it compulsory for all vehicles to have electronic stability control (ESC). This feature helps to prevent cars from rolling by improving engine power delivery and braking. Research has shown that the risk of rolling in cars fitted with ESC is slashed by 73% and a fatal crash by 33%.

There are other devices in the market aimed at improving drivers’ awareness of risk factors and making automatic adjustments to reflect the dangers. Examples include proximity and drifting monitors that automatically track how close surrounding vehicles are, and restricting acceleration to ensure an adequate distance is maintained. In devices that monitor drivers drifting out of their lane, if the vehicle moves too close to a lane marker with a turn signal, an alarm goes off warning the driver of the danger. Alcohol detectors are also available, which prevent the ignition from working if alcohol is identified on a linked breathalyzer.

Alcohol plays a significant role in road accidents, with a drink-related traffic fatality occurring every 48 minutes and 32% of all vehicle fatalities resulting from intoxication. Alcohol combined with speeding has been demonstrated to be a particularly lethal mix, with 43% of drunk drivers involved in an accident with fatalities shown to be driving too fast, compared with 17% of sober drivers.

However, despite the severity of the consequences for drunk driving and speeding, drivers who get behind the wheel of a vehicle when tired or fail to pay proper attention to the road also cause more than their fair share of accidents. One study revealed that one in six traffic accidents resulting in a fatality involved a fatigued driver.³

Distracted drivers were responsible for 16% of all fatal crashes in 2009, with one in five of the culprits admitting to cell phone use.⁴ While cell phones were identified as a significant factor in car accidents, other distractions such as attempting to grab a moving object within the car, were found to be even more risky. However, a number of studies have looked at the various ways to try and mitigate the risk of using a cell while driving, including the use of hands-free kits, and concluded that there was no safe option. A study carried out at Utah University reported in 2006 demonstrated that hands free cell phones still resulted in 18% slower braking and 17% slower re-acceleration.

With any accident likely to result in significant stress and inconvenience, and potentially also a lawsuit, the consensus of opinion is to keep away from the car if you are over tired or you have been drinking. While driving, switch off the cell phone, keep the radio volume low and give the road ahead your undivided attention.

Centers for Disease Control and Prevention, Motor Vehicle Safety, 2010.
Insurance Institute for Highway Safety, Crash Avoidance Technology, February 2010
AAA Foundation for Traffic Safety, November 2010
National Highway Traffic Safety Administration, September 2010