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Sunday, April 10, 2011

Safer cars = lower insurance rates, right?

Crash-avoidance systems. Adaptive cruise control. Self-parking technology. The list of advancements designed to make driving safer gets longer every year, and the highway death rate has fallen by 80 percent since 1967.

It's not unreasonable to think that, one of these days, such features may eliminate crashes for good – and perhaps make a sizable dent in car insurance costs as well.

David Thomas, senior editor for, believes a world without crashes is about as far-fetched as a science fiction movie. "You'd have to, first, develop those cars that never got into accidents, and, second, retire the entire current fleet that would not be thus equipped, about 250 million cars," he says.

"Then you'd also have to make sure every semi truck, every emergency vehicle, every school bus, every letter carrier's vehicle and every government car or truck would also be equipped with these high-tech crash avoidance features."

Cars are safer; drivers are not

Clearly, that's a long way off. But that doesn't mean we aren't already seeing fewer fatal accidents, a reduction undeniably resulting from high-tech safety features, Thomas says. Back in 2008-09, when roadway fatalities fell off noticeably, many assumed this very positive development resulted from fewer people driving during the great recession's worst days. "But the falloff was seen again last year, when people were driving more," 

Thomas says:

"And the reason is the safety equipment in the car: the advanced side and side-curtain airbags, stability control and the one most people don't know about --the improved structure of vehicles. That structure uses high-strength steel and aluminum and is designed to disperse shock through the vehicle cabin."

Also enhancing safety are features that help prevent crashes from occurring in the first place. These include forward collision warning systems, lane-departure warning systems and blind-spot warning systems, Thomas says.

Still ahead, he adds, is the dawning of an era in which vehicles will be able to communicate with each other, so that not only are crashes avoided, but also traffic moves perfectly. This technology was tried out last year on the so-called Google Robot Car, a Toyota Prius equipped with advanced versions of currently available safety features that drove itself for about 140,000 miles through heavy traffic in San Francisco and Los Angeles.

"They had someone behind the wheel at all times who could take over if needed, but supposedly that wasn't often the case," Thomas says. "They tested it for a very long time

before announcing it existed. It never had an issue except for one time when a car hit it from behind.”

“What did we learn?” Thomas asks. “That it can be done. It can be done in a way that someone going to work could use."

Safer = lower rates, right?

The bottom line, Thomas says, is that technology, specifically in the development of smart keys, helped make it more difficult to steal a car, and car insurance costs came down as a result, he says. "Now you're seeing a decline in fatal accidents," he adds. "Hopefully we'll see that result in lower rates, too."

But some insurance industry observers question how realistic that dream is.

"Will there ever be a day with no or only a few accidents?" asks Christopher J. Boggs, director of education with the San Diego-based Insurance Journal Academy of Insurance. "No. While you may see a percentage drop in accidents, people are still in control of the vehicle and can choose to ignore or may not know how to react to warnings. I do believe there may be a larger reduction in the severity of accidents, especially if both cars involved are equipped with the technology. . . . While there may be a small reduction in frequency, I think the greatest reduction will be in severity."

Weighing in from State Farm Insurance in Bloomington, Ill., spokesman Dick Luedke observes that the evolution toward a totally crash-free world will be a slow one. Still, he says, the technology-driven improvements in vehicle safety that reduce crashes are great for hemming in car insurance costs.

"But auto insurance protects you from more than the cost of crashes," he adds. "There are weather events, stolen vehicles, vandalism and more."

As automobile manufacturers are adding many state-of-the-art features to prevent crashes, these features also add to the cost of the vehicles, and to the cost of repairing vehicles after crashes.

"This trend of fewer crashes has already begun, but the average cost of accidents has not gone down," Luedke says. "So there's a lot to consider."