New car security features can make auto insurance more expensive: NPR

Many new cars sold today can take preventative measures to avoid collisions – braking before a collision, bypassing obstacles or alerting drivers of hazards in blind spots.

These safety features, known as advanced driver assistance systems or ADAS, reduce the risk of an accident. It may seem logical to assume that they would reduce the cost of auto insurance.

But instead, these advanced security features can actually generate bonuses up. Indeed, when such cars go into accidents, repairs are more expensive – thanks to the series of sensors and computers that make these features possible.

Scott Wallisch, director of car pricing at American Family Insurance, says lighthouses are a good example.

"A lot of vehicles go to adaptive headlights that look around the corner at night or are LED and they are very bright," he says.

The advantage is easy to see – it helps the driver to see better and to avoid hitting something. But: "If a lighthouse falls into an accident, it took $ 200 to replace it," says Wallisch. "Now it's $ 2,000 to replace the same lighthouse."

This is the same story for other security features. If your car is watching the blind spot, the technology in your mirrors may be more expensive than it looks and the sensors that help your vehicle detect pedestrians increase the cost of your car. your bumper. Windshield, rear sensors … the list is long.

"At least up to now, improvements in safety and accident prevention have not been large enough to offset the increase in vehicle repair costs," said Michael Klein, President of Travelers Insurance at Travelers. The increase in repair costs is passed on to consumers, he says.

New cars tend to be more expensive to insure anyway, and instead of giving consumers a break, advanced safety technology can drive up costs.

But Klein points out that this should not deter anyone from choosing a safer vehicle.

"Not all incentives are economical," he says. "If you have the opportunity to buy a vehicle whose characteristics should make it safer and less likely to fall victim to an accident, it should: [to] worth something for you. "

The general trend is continuing in the industry. Sandee Perfetto works at Verisk, a company that provides data analytics to the insurance industry, where she leads the development of personal auto products.

"We have seen an increase in auto insurance premiums," she says. "There may be a number of factors that can be attributed, but it's potentially one of them."

However, policies vary and Consumer Watchdog's Carmen Balber says it's essential to shop around.

"Our research has shown that some auto insurance companies give consumers discounts for using these safety devices, but you may have to look around and vary from state to state.

Automatic emergency braking, when the car presses the brakes if it predicts an accident, is more likely to provide a discount to its owner, said several experts. But this is not guaranteed. And many other features will probably not save on insurance costs.

This could change in the future. The new technology could become cheaper over time, as is often the case. Or, as security features become more common, they could further reduce accidents and change the cost-benefit analysis.

Insurers may simply need more time to understand the effectiveness of the new security features. After all, insurers are now setting rates based on all the data collected in the past – that's how the entire industry works.

But some of these security features are all new and there has not been a lot of time to accumulate data.

Tom Karol, of the National Association of Mutual Insurance Companies, said the technology was not only new, but that it was evolving. A feature could work one way this year and then get an update next year. And automakers are not always eager to share details of their patented technology.

"It's very difficult to get data on a moving target like this," he says.

Balber, of Consumer Watchdog, rejects the idea that the auto insurance industry needs more data on security features.

"Insurance companies have the data they need, if they choose to look for it, to determine if these safety features actually reduce accidents," she says.

But Amy Bach, who runs United Policyholders, a nonprofit consumer organization, is not surprised to see insurers taking their time to evaluate the features. Historically, the insurance industry has done a lot to promote safety, but the changes are not happening quickly.

"Insurance … it's all about risk," she says. "Insurers tend to be cautious."