Abstract

Local Government Risk Management Services (LGRMS) indicates that its No. 1 loss within law enforcement continues to be related to motor vehicle incidents. In order to reduce the risk of these incidents from occurring in the future, LGRMS provides simulator training for its members. As documented by our review of the literature, a question that has remained largely unanswered by prior studies is the efficacy of this sort of training in mitigating risk management costs. In this study, we use accident loss cost data over the period 2000-2015 to determine whether motor vehicle simulator training is reducing loss frequency and severity, and whether such training is cost effective. Our analysis suggests that the training not only reduces accident frequency, and to some extent loss severity, but its return on investment (ROI) is 12:1. Given the recent concern over increasing motor vehicle loss frequency and severity in most states, our research has important implications for state legislative and regulatory authorities as they seek ways to mitigate growing motor vehicle loss costs. In addition to the benefits that we document for the use of motor vehicle simulator training of law enforcement officers (LEOs), our results suggest that efforts by state insurance regulators and legislators to facilitate and encourage motor vehicle simulator use as part of their state's licensing and insurance requirements would provide important benefits to the public in their state.

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