Karl: Determining the risk, price of distracted driving

Brad Karl is State Farm Associate Professor of Risk Management & Insurance and Research Director for the Center for Risk Management Education & Research at FSU's College of Business.
bkarl@business.fsu.edu

Consider this domino effect of risk management: Unfocused drivers often cause accidents – possibly fatalities – and then, insurance carriers consider the cost of these crashes when they determine how much consumers must ante up for future auto premiums. But how does the insurance industry quantify the risks? 

Brad Karl, State Farm Associate Professor of Risk Management and Insurance at the Florida State University College of Business, has spent the last half of a decade studying the economic cost of distracted driving, including how cell phone bans affect automobile insurance claims and costs, as well as refining estimates of the risk posed by distracted driving. 

The study is coauthored by Charles Nyce, the department chair and Dr. William T. Hold Associate Professor of Risk Management and Insurance in the Department of Risk Management/Insurance, Real Estate and Legal Studies, and two faculty members – Lawrence Powell and Boyi Zhuang – from the University of Alabama. “How risky is distracted driving?” was published in May 2023 by the Journal of Risk and Uncertainty. Among its findings:

• 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.

Karl believes this research can help insurance industry leaders and lawmakers grapple with the problems of traffic fatalities and insurance costs. “I like doing research that has public-policy implications,” Karl said. “I think that’s how you can make a difference in academics.”

Recent publications or presentations:

Karl, J.B., Nyce, C.M., Powell, L. et al. How risky is distracted driving? J Risk Uncertain 66, 279–312 (2023). https://doi.org/10.1007/s11166-023-09405-3 

Patricia Born & J. Bradley Karl & Robert Klein, 2023. "An Empirical Assessment of Regulatory Lag in Insurance Rate Filings," North American Actuarial Journal, Taylor & Francis Journals, vol. 27(3), pages 602-617, July. https://ideas.repec.org/a/taf/uaajxx/v27y2023i3p602-617.html