Today’s insane cost of living has almost everyone desperately searching for ways to reduce their expenses and save a few bucks.
In the insurance space, this means paying less in monthly premiums.
There are many ways to do so, like opting for a higher excess in exchange for a lower premium. However, the issue with that is when a claim event occurs, will you be able to raise the amount needed to cover said higher excess?
For a lot of people, the answer is no.
So, people have had to get creative in their quest for lower premium prices.
Recently, one solution that’s popped up quite a bit is having advanced safety features.
So we had to ask ourselves, “Is having advanced safety features in cars the way to decrease insane insurance premium prices?”
Understanding Automatic Emergency Braking (AEB).
Automatic Emergency Braking (AEB) is a safety technology in most modern cars. It’s designed to help prevent collisions by automatically applying the brakes when the vehicle’s system detects a potential collision.
AEB systems use sensors like cameras, radar or Lidar scanners to detect objects in the vehicle’s path.
These sensors continuously scan the road ahead and assess the distance and speed of any objects, like other vehicles or pedestrians, in front of the car.
Suppose the system detects an imminent collision, and the driver fails to respond quickly. In that case, the AEB system automatically applies the brakes to help avoid and mitigate the crash.
Other systems can also provide a warning, like an audible or visual warning, to prompt the driver to take action.
Numerous studies have shown that AEB systems in vehicles drastically reduce the frequency of collision-related accidents.
Research conducted in 2019 by Jessica B. Cicchino and David B. Zuby titled Characteristics of rear-end crashes involving passenger vehicles with automatic emergency braking indicated AEB has been shown to reduce impact crash rates by up to 27%.
Another study published the following year found that AEB prevented 83% of rear-end crashes, much more significant than reported in the past, ranging from 38% to 70% (Jermakian, 2011; Fildes et al., 2015; Cicchino, 2017).
And in terms of its effectiveness and limitations in collisions with cyclists, Y. Zhao, D. Ito, and K. Mizuno discovered that the efficacy ranged from 35 to 59% for fatalities, 14 to 54% for significant injuries, and 11 to 42% for minor ones.
But AEB systems still have a ways to go.
It’s reportedly less effective in preventing rear-end crashes in poor weather conditions or at higher speeds, with 43% of crashes occurring in inclement weather.
Additionally, the technology used in AEB systems has proven necessary for making driving easier and safer.
Best of all, they may also result in lower car insurance premiums.
England’s Thatcham Research estimated that insurance for a car fitted with an AEB system could decrease by as much as 10%.
AEB reduces the frequency and severity of accidents, meaning fewer claims resulting in lower costs for the insurance company.
So, insurance providers can afford discounts for vehicles fitted with AEB technology.
Adaptive Cruise Control (ACC) and its Benefits.
Adaptive Cruise Control (ACC) is an advanced driver assistance system designed to automatically control the vehicle's acceleration, helping the car maintain a safe following distance while staying within the speed limit.
ACC works like this – the driver sets the vehicle's speed, just like traditional cruise control (you can select the speed using the +/- speed button.). The ACC system then uses sensors and radar to detect the distance between your car and the one in front of it.
Based on the distance and speed of the vehicle in front, the ACC automatically adjusts the speed to maintain a safe following distance.
Should the car in front slow down or come to a stop, the ACC system will also slow down or stop entirely.
Alternatively, if the vehicle in front speeds up or changes lanes, the ACC will again adjust the speed to maintain the set distance.
And while ACC systems have been hailed for the ease they provide motorists and safety, there are still limitations and risks arising from this system.
Drivers were more likely to speed when using ACC than manual control. They became overconfident, setting their ACC to speeds higher than the posted limits.
In 2018 the World Health Organization released data indicating that the number of people who died from car accidents reached 1.35 million, the eighth leading cause of death for all age groups, surpassing HIV/AIDS and tuberculosis.
ACC systems can also be affected by poor weather conditions, such as heavy rain, snow, and fog can interfere with the sensors and radar system that ACC relies on to operate.
Not to mention, driving through structures like tunnels has a similar negative effect on ACC systems.
However, research also suggests that ACC can reduce car accidents when used correctly.
Statistics suggest adaptive cruise control has the potential to assist in reducing accidents by as much as 14%, particularly in situations where rear-end collisions are a commonality, like on highways or in heavy traffic.
That said, there’s no substitute for a safe and attentive driver.
That’s why it’s essential to stay alert and ready to take control of the car at a moment’s notice.
Regarding ACC’s effect on car insurance premiums, the truth is that very few insurance providers offer discounts as the technology is not yet standard in the industry.
Meaning there’s insufficient data surrounding the technology.
New car technology also makes cars more costly for insurers to repair and replace. That, and it doesn’t necessarily negate driver error.
Additionally, any potential discounts depend entirely on the policy you have and with which insurance company.
So although you might end up not saving a lot with tech that makes your car safer, there’s no denying how beneficial (not to mention lifesaving) these safety features are.
Impact of AEB and ACC on Insurance Premiums.
Several metrics go into calculating an insurance premium.
An insurer will look at all of these factors together to assess the level of risk a client poses and to determine the appropriate insurance premiums.
- Demographics: Insurance providers consider age, gender and marital status because these factors affect the likelihood of you lodging a claim. Additionally, younger drivers (under 25) pay more than older drivers due to inexperience.
- Vehicle type: Your particulars aren’t the only thing insurers pay attention to; your car’s make and model also play a part in the outcome of premiums. The more expensive a vehicle, the higher the premium. Cars with a higher price tag are more costly to repair and replace, and that’s reflected in the premium.
- Location: Where the car is parked and driven also affects insurance premiums. Those living in urban areas with high traffic volumes, accidents and other incidents like theft and vandalism will pay more for insurance than those living in rural areas.
- Driving/Insurance history: Motorists with a clean driving history and no traffic violations or accidents typically pay less for car insurance. Age also plays a role, as older drivers are usually less reckless on the road than their younger counterparts.
- Coverage: The policy, level of coverage, and excess amount also significantly affect your premium price. The general rule is the higher the coverage lever, the more you’ll pay for the policy. Alternatively, the lower your excess amount, the higher your monthly premium.
- Credit score: Some insurers also use your credit score to determine your risk level. The credit score gives insurance providers an idea of how you handle payments and your money behaviour. Drivers with good credit scores are often rewarded with lower insurance premiums.
We’ve already established that cars with advanced safety features cause fewer car accidents, meaning policyholders lodge fewer claims compared to those whose vehicles aren’t fitted with these features.
A report by the US Insurance Institute for Highway Safety (IIHS) showed that drivers of vehicles equipped with AEB could expect to save up to 10% on their insurance premiums compared to those without this feature.
But again, the actual amount differs based on the insurance provider, with some insurers not offering any discounts at all.
Unfortunately, safety features and anti-theft devices don’t always offer respite when lowering your car insurance premiums.
Such is the case with ACC; few insurers offer an incentive of discounted premiums for having this safety feature installed in your vehicle. However, for the insurers offering a discount, you can save as much as 5% on your monthly insurance premiums.
Talk to an agent from your insurance provider to determine if they offer such a discount and whether you’re eligible.
In addition to chatting to an insurance agent about the options available, here are a few sources shedding light on insurance discounts for AEB and ACC.
Adaptive Cruise Control Car Insurance Discount - US Insurance Agents, 2022.
Why tech that makes your car safer won’t lower your insurance rates - The Zebra, 2023.
Smart cars: how technology is putting the brakes on insurance premiums - The Guardian, 2016.
Does high-tech car safety kit help lower your insurance costs? - Uswitch, 2021.
Additional Advanced Safety Features.
A while back, seatbelts and airbags were all the rage in vehicle safety. Now, it’s the age of Advanced Driver Assistance Systems (ADAS).
ADAS refers to the suite of features designed to improve the safety and convenience of a person’s driving experience.
AEB and ACC safety features fall into this category.
The great thing is they’re not the only advanced safety features at your disposal that promise to make your driving experience safer and smoother.
A 2021 LexisNexis Risk Solutions white paper identified a few core features of ADAS that improved safety and impacted claim frequency and severity, namely,
- Adaptive headlights.
- Blindspot warning and mitigation.
- Driver monitoring.
- Forward collision warning and mitigation.
- Rear collision warning and mitigation.
- Lane departure warning and mitigation.
In the study, vehicles equipped with advanced driver adaptive systems showed a decrease of 23% in the cost of bodily injury claims, a 14% reduction in the price of property damage claims and an 8% decline in the cost of collision claims, as compared to non-ADAS fitted vehicles.
However, despite promoting safer driving behaviour, safety features don’t always guarantee an automatic decrease in premiums or policy benefits in the form of discounts.
The relationship between a car’s safety features and its insurance premiums can be complicated.
A safer ride can help save you money by reducing the likelihood of an accident. But, the expensive safety equipment increases the cost of repairing your car, resulting in higher premiums.
As more research is done to back up the findings of how beneficial safety features are in modern cars, it’s only a matter of time before insurers ‘play ball’.
And as more vehicles are manufactured with ADAS already included, or these safety features are added later, the technology will become more affordable to repair and replace.
This will, again, cause insurance providers to seriously consider restructuring the insurance premium structure, especially where discounts are concerned.
However, even without insurance discounts, advanced driver assistance systems can still play a crucial part by helping you avoid serious accidents that would otherwise devastate your vehicle and finances.
ADAS helps you navigate potentially hazardous tasks like backing up in a crowded parking lot, changing lanes or driving behind a car that may come to a sudden stop.
But the best way to benefit from ADAS's ease, safety and stress-free driving experience is to be an active driver.
No matter how expensive, high-tech and capable a car’s safety features are, ADAS is only as good as the car's driver.
Wow, you've actually read this far? Color us impressed! Now, do something unpredictable – get a quote! Trust us, it's the least regrettable decision you'll make today. Go on, surprise yourself (and us)!
Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply. Premium is risk profile dependent.
Mathapelo Mosia
Mathapelo, Pineapple's Junior Copywriter, has a diverse background, including roles like Leaflet Distributor, Bridal Stylist, and Junior Sales Activation Officer. Her love for literature was sparked in grade 5 by a teacher's challenge involving books and chocolate. Though the prize was never received, she developed a passion for reading and writing.
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Disclaimer
Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
