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In spite of all the advancements in vehicle safety and driver support, traffic fatalities across the country still surpass 40,000 annually. Distracted driving, like texting while operating a vehicle, evidently contributes to these deadly incidents. But what are the dangers and financial repercussions?

Ongoing investigations by faculty members at Florida State University’s College of Business in the Dr. William T. Hold/The Alliance’s Program in Risk Management and Insurance produce insights that assist in informing markets and public decision-makers.

“There’s a substantial economic burden associated with this,” stated Brad Karl, State Farm Professor of Risk Management and Insurance and research director for FSU’s Risk Management and Insurance Center. Numerous studies have examined the detrimental aspects of distracted driving, but significantly fewer have addressed the financial consequences, Karl mentioned.

The collection of research regarding distracted driving supports the logical presumption that legal initiatives to mitigate distracted driving lead to enhanced driver conduct, which minimizes the likelihood of vehicular collisions. Safety advocates have long utilized these results to promote policies and legislation: Almost every state in the country now prohibits texting while driving.

Karl, alongside co-author Charles Nyce, the Dr. William T. Hold Professor of Risk Management and Insurance, expanded upon these insights, assessing what these prohibitions and behaviors would translate to financially for the average driver or insurance provider. Their findings, published in the “Journal of Risk and Insurance” and the “North American Actuarial Journal,” indicated that a state prohibition on hand-held mobile phones while driving reduced incurred losses for auto insurers and loss ratios by 3% and gradually lowered insurance premium costs. They also discovered that states implementing these bans reduced the average cost per insured vehicle by 7.7%, accumulating tens of millions of dollars in average savings for each state.

“We approached this by analyzing the frequency and expenses related to insurance claims, concentrating on the impacts of these bans on the auto liability market specifically,” explained Nyce, who also heads 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 recognized that our new perspective could prove advantageous to regulators and policymakers as well as the insurance sector.”

More recently, Karl and Nyce examined the issue from another perspective: How hazardous is distracted driving? Collaborating with researchers Lawrence Powell and Boyi Zhuang from the University of Alabama, they conducted a deeper analysis of data from the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System (FARS), which records every fatal traffic accident nationwide.

Among their outcomes published in the “Journal of Risk and Uncertainty:”

• Drivers who are distracted are three times more likely than attentive drivers to cause a deadly accident
• Approximately 3-4% of drivers at any moment are distracted
• Distractions associated with mobile phone usage are less likely to lead to fatalities than other factors, such as “eating, passengers, insects and reptiles, and other electronic devices”
• The external cost of distracted driving resulting in fatalities is 2 to 5 cents per mile
• All distracted drivers should be incurring an additional $577 annually to reflect the increased risk cost

New insights for improved business choices

Karl mentioned that most academic researchers, like himself, are very careful to steer clear of presenting opinions alongside their findings.

“Our role is not to determine whether the law is needed or not,” Karl remarked. “However, we can offer quantitative answers to essential questions that aid in making these kinds of decisions.”

He hopes his research is making a meaningful impact.

“I never aim to conduct academic research merely for the sake of academia,” Karl stated. “I have always been intrigued by regulation and the consequences and costs associated with it. I have pursued that throughout most of my career within the framework of insurance markets.”

He emphasizes that, beyond the heartbreaking toll of lives lost, auto fatalities adversely impact insurance costs. “We strive to quantify those costs in the most effective manner possible,” he said.

Karl warns that their findings pertain to a specific time frame and that results will adapt as technology and individuals change. For example, he noted that their most recently released article on the risk of distracted driving reviewed traffic fatality data from 2000 to 2018.

“I don’t believe significantly more people are using mobile phones today,” Karl noted. “But consider how many additional apps and fresh opportunities people have to be distracted on their phones since then. It seems plausible that distraction levels have risen in 2025.”

Karl and Nyce, together with Patricia Born, the Payne H. and Charlotte Hodges Midyette Eminent Scholar in Risk Management and Insurance, continue to produce findings pertinent to the auto insurance domain. Recent studies co-authored by one or more of them include:

• Assessing the Risk of Fatal Traffic Accidents Due to Cannabis-Impaired Driving
• Identifying Dangerous Drivers: Addressing Sample Selection Bias with New Estimates
• Availability of the Seat Belt Defense: Implications for Auto Liability Insurance
• The Risks of Distracted Driving
• No-Fault Auto Insurance Reform in Michigan: A Revised Initial Assessment
• The Impact of Distracted Driving Laws on Automobile Liability Insurance Claims
• The Influence of Mobile Phone Bans on Automobile Insurance Markets

The FSU RMI faculty is ranked No. 6 worldwide 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 for more information regarding the Dr. William T. Hold/The Alliance’s Program in Risk Management and Insurance.

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