Neither the cities that have traffic cameras nor the private companies that operate them are the biggest financial beneficiaries of photo enforcement. In states like Arizona and California where automated citations carry points against the recipient’s driver’s license, insurance companies are generating four times more revenue from photo tickets than California and Arizona cities.
The Zebra, an online car insurance cost comparison website, analyzed insurance rates for 61 million policies from 650 insurance companies nationwide over the last eight years. The company distilled its findings on 43,500 potential ratings factors into an annual report on the state of automobile insurance. The latest report calculates that insurance companies are pocketing $1000 in additional profit for every photo citation issued in states where such tickets carry license points.
The Zebra found that different types of traffic violations carry varying levels of impact on the cost of insurance. For instance, insurance companies on average collect an extra 6.7 percent, or $293, from drivers who are involved in an accident caused by another motorist. An at-fault accident costs $1851 — a 42 percent premium hike. Being issued a ticket for using a cell phone behind the wheel can cost $864, and a drunk driving conviction will boost rates $3,258 over three years — an increase of 74 percent.
Receiving a red light camera ticket in states like California and Arizona raises an individual’s insurance premium by $999 over three years. A speed camera ticket in Arizona, likewise, carries an extra cost of $1024. This is only part of the total cost for California drivers, who are also on the hook for each $490 ticket. While California has the nation’s highest photo ticket cost, the cities do not pocket anywhere near $490 per ticket, as profits are split with the county government and the for-profit camera vendor. The insurance companies face no such costs, and the companies do not provide any additional services for the added premium.
The amount of revenue being generated is substantial. Last year, Scottsdale, Arizona’s speed camera vendor issued 41,961 tickets worth $43 million in profit to the insurance industry. Using figures from the California Judicial Council obtained by HighwayRobbery.net, 1,510,705 red light camera tickets were issued statewide between 2013 and 2017. That represents $1.5 billion in added profit to AAA, State Farm, Geico, Allstate, Progressive and other insurance firms over five years. That is a far more significant take than the $740,245,450 split between the camera companies and local governments over the same period.
The insurance industry has spent millions promoting the use of red light cameras and speed cameras nationwide. The first and most vocal advocate of automated ticketing has been the insurance industry’s lobbying arm, the Insurance Institute for Highway Safety (IIHS), which created the very first studies used as a justification for the installation of cameras.