The Economic Effects of Road Safety Improvements: An Insurance Claims Analysis

David J. Feber, Judith M. Feldmeier and Keith J. Crocker

Journal of Risk & Insurance, 2003, vol. 70, issue 4, 651-664

Abstract: This article demonstrates the feasibility of exploiting insurance claims data to estimate the marginal benefits to society of highway infrastructure improvements. We construct a unique database linking claims expenditures for a major auto insurer in Michigan to infrastructure investments at 62 intersections in the City of Detroit, and conclude that the addition of a left‐turn lane, or left‐turn phase in the signal, decreases the insurer's average monthly claims costs at a representative intersection by $944 or $1,062, respectively. The evidence also indicates that these cost savings are a result of reductions in accident severity, rather than being a consequence of fewer accidents.

Date: 2003
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