Study Finds Potholes Cost Insurers, Consumers $27B

Poor road conditions have cost consumers and the insurance industry at least $27 billion over a five year period, according to a 2014 survey commissioned by Trusted Choice and the Independent Insurance Agents & Brokers of America.

The survey also reveals that from 2009 to 2014 half of car owners experienced damage to their vehicles as a result of potholes.

“The snow, ice and freezing rain during the rough winter months left their mark on the country’s roads,” says Robert Rusbuldt, Trusted Choice president and Big “I” president & CEO. “Severe potholes have led to accidents which may impact insurance rates, as premiums are determined by past claims, accidents and driving violations. Potholes and poor road conditions aren’t just an inconvenience, they are an expensive and dangerous result of harsh winters.”

The pothole survey also found that 31 percent of car owners who reported pothole damage to their vehicles filed a claim with their insurance company. A surprising 65 percent of respondents who needed repairs said they (or a third party) paid out of pocket for the vehicle to be fixed. Only about 3 percent said local authorities stepped in to foot the bill. For about 40 percent of respondents, that bill was more than $500.

“This survey highlights how widespread the pothole problem is on our roadways and that the costs are enormous to both the insurance industry and to consumers,” says Madelyn Flannagan, Big “I” vice president of agent development, research and education. “And now, local authorities are struggling to keep up with the extensive road repairs.”

While motorists in the Midwest, Northeast and North Central regions of the country reported the most pothole damage, surprisingly the numbers were not that different even in the Southern and Western regions which typically experience milder winters.

The pothole survey was conducted for Trusted Choice and the Big “I” by MFour Mobile Research, Inc. using MFour’s Surveys on the Go^® Smartphone Application Panel which includes Apple and Android mobile device users. MFour is an independent research company headquartered in Costa Mesa, California. Interviews of a nationally representative sample of 2,565 U.S. car owners were conducted in June 2014 and weighted by age and gender to represent the general U.S. population over age 18.

Source: Trusted Choice