Speed has an outsized influence on the likelihood and severity of auto accidents. While it is widely recognized that fast-moving vehicles are prone to more frequent and costly accidents than comparable slow-moving vehicles, the extent to which speed amplifies risk and intensifies crash outcomes is often underappreciated.
While the disproportionate effect of speed on auto accidents leads to undesirable outcomes, it also presents a powerful and accessible opportunity to reduce risk and improve commercial auto losses. Unlike many factors contributing to collisions, vehicle speed is directly within a driver’s control. By exercising their authority and opting for reduced speeds, drivers can substantially improve their anticipated loss experience.
Avoiding the “speed trap” requires not a radar detector, but an appreciation of speed’s profound impact on safety. As we will see, even modest reductions in speed can lead to significant long-term savings in commercial auto losses.
Accident Risk
Studies show that the risk of an accident increases roughly in proportion to the square of speed (v2), where v represents a vehicle’s speed. This means that every time speed doubles, accident risk quadruples. One study concluded that a 1% increase in speed results in a 2% – 4% increase in the frequency of accidents. As we will see, the nature of this relationship stems from its underlying physical properties, including braking distance and driver reaction time.
Braking Distance
Like accident risk, braking distance increases with the square of a vehicle’s speed. Consequently, when speed doubles, the distance required to stop increases fourfold. For example, a vehicle traveling 80 mph requires 4 times the braking distance as a comparable vehicle traveling 40 mph.
Interestingly, braking distance increases linearly with vehicle weight. When weight doubles, braking distance also doubles. Consequently, braking distance is significantly more affected by a change in speed than a change in weight.
Extending braking distance increases the likelihood of accidents, in part, because it reduces the ability of the driver to avoid collisions. Higher speeds also tend to increase the number of potential obstacles, such as when a vehicle passes slower traffic.
Reaction Time
Studies show that the average time for a driver to react to danger is about 1 second, no matter how fast they’re traveling. Given that there are 86,400 seconds each day, how important is a single second? Well, at 60 mph, a vehicle travels 88 feet before the driver even begins to brake – about the length of a regulation basketball court. Higher vehicle speeds shrink the window for observation, decision-making, and action. Even for those drivers with cat-like reflexes, the math doesn’t lie, the likelihood of an accident due to insufficient reaction time still increases in proportion to speed.
Accident Severity
Speed does not only increase accident risk, it also amplifies the severity of accidents when they occur. The kinetic energy of a moving vehicle (that’s the force it carries) scales with the square of its speed. This is succinctly represented in the formula for kinetic energy (straight from your favorite high school physics textbook):
KE = ½ mv²
where KE = kinetic energy, m = mass (vehicle weight), v = velocity (vehicle speed).
Just like accident risk, accident severity quadruples each time speed doubles.
Understandably, higher kinetic energy increases vehicle operating costs due to things like more rapid brake and tire wear, but what does kinetic energy have to do with insurance costs? Insurers may not measure the kinetic energy of auto crashes, but they closely monitor the costs. It is no surprise that studies confirm that accident costs tend to rise with the square of speed, just like kinetic energy. A small increase in speed can lead to a massive jump in costs related to injuries and property damage.
Speed’s Compound Effect
We now know that speed has a leveraged effect on accident risk as well as accident severity. Insurers use these metrics to estimate expected loss, the total expected cost of accidents. Expected loss equals the product of accident risk and accident severity:
Expected Loss = Accident Risk × Accident Severity
Expected loss is an important concept because it is the basis for an insurer’s premium calculation. Higher expected loss estimates yield higher insurance premiums.
So, how does expected loss relate to speed? Combine the increased accident risk (which scales with the square of speed) and the increased accident severity (which also scales with the square of speed), and you get a jaw-dropping result: expected loss grows with the fourth power of speed (v4).
For example:
- When speed doubles, expected loss doesn’t just double or even quadruple, it skyrockets by a factor of 16. [16 = (2)4]
- Even a modest 10% increase in speed yields a 46% jump in expected loss. [46% = (1 + 10%)4 – 1]
This relationship exemplifies the “speed trap”: expected loss increases exponentially with speed. More specifically, each time speed doubles, expected loss increases by a factor of 16.
Archimedes in the Driver’s Seat
Now for the good news: speed is one of the few factors that’s directly within control of drivers. Unlike weather, road conditions, or other drivers’ behavior, speed can be easily reduced. By slowing down, drivers can reduce both the likelihood and the cost of accidents.
Archimedes once said, “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” In the world of auto insurance, speed is that lever. Commercial auto insurance costs have been climbing relentlessly, squeezing profits from businesses that depend on their vehicles. For a commercial fleet, this represents a golden opportunity. Measuring drivers and training them to ease off the gas (and explaining why it also benefits them) can lead to out-sized benefits – fewer and less costly accidents, and ultimately, a safer and more profitable business.