2018

Why Tech That Makes Your Car Safer Won’t Lower Your Insurance Rates

Does your car have blind spot monitoring, a backup camera, or a security alarm? Those features could keep your car safer and prevent theft, but insurance companies aren't likely to reward you with a discount.

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Tech and automotive companies are racing to create increasingly connected, autonomous cars. In fact, many of us are already driving vehicles with advanced safety and anti-theft technology.

As consumers, we might pat ourselves on the back for making smart, safe decisions. And since our modern cars are helping prevent and minimize car crashes and reduce vehicle theft, shouldn’t we also assume our auto insurers will reward us with discounted rates?

The Zebra examined nine safety features and four anti-theft devices to understand their technical effectiveness, their driver adoption, and their impact on auto insurance rates.

 


KEY FINDINGS

Despite proven safety and security benefits, new in-car safety and anti-theft technology features save drivers less than 1% on car insurance.

 

1. The data: Safety features and anti-theft devices DON’T lower your car insurance rates

2. Experts (and drivers) see value in new car safety and security tech

3. Why insurance companies aren't lowering rates for safer and more secure cars

 


KEY FINDING 1

The Data: Safety Features and Anti-theft Devices DON’T Lower Your Car Insurance

 

Of nine safety technologies, only one lowered car insurance — by a paltry $7 per year.

  • Electronic stability control (ESC) lowered car insurance rates 0.49% (or about $7) on a national average annual premium of $1,427.

  • No other safety features yielded any car insurance savings:

    • Collision preparation system — $0 savings

    • Blind spot monitoring — $0 savings

    • Driver alertness monitoring — $0 savings

    • Lane departure warning — $0 savings

    • Rear-view camera — $0 savings

    • Heads-up display — $0 savings

    • Night vision — $0 savings

    • Park assist — $0 savings

 

The max annual safety tech savings nationwide? $26.

  • Connecticut drivers saw the highest savings for any safety devices, with ESC lowering premiums by $26.

  • Only one state, Michigan, offered any savings for other safety features. There, drivers save about $7 (or 0.27%) for having collision preparation systems, heads-up display systems, and blind spot monitoring in their vehicles.

  • In 15 states, not one of the safety devices lowered rates.

 

Four anti-theft technologies yield savings — but at most $10 per year.

  • Though all anti-theft devices yielded some savings nationally, the highest savings are $9.60 (or just 0.67%) per year.

    • Passive disabling device — $9.60 savings

    • Tracking device — $7.53 savings

    • Active disabling device — $5.38 savings

    • Audible alarm — $5.04 savings

  • Insurers in all but two states reduce rates for at least one of the anti-theft devices, and in 34 states, they reduce rates for all anti-theft technologies.

 


KEY FINDING 2

Experts Say the Tech Works — and Drivers Want It

Because insurance companies assess risk of drivers — and their cars — to determine rates, it might stand to reason that these safety and security devices just aren’t that effective, and that’s why drivers aren’t seeing discounts for using them.

Not so, says the data.

Most of the technologies have been verified for safety and security effectiveness by authorities including the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS).

 

Experts: New Car Safety & Security Features Work

Technology Feature Safety or Security Function Does it Work? Annual Insurance Savings
Electronic stability control (ESC) Continuously monitors vehicle's response to driver's steering input; selectively brakes and modulates engine power to keep vehicle on steering wheel’s path and prevent sideways skidding or rollovers Lowers the risk of a fatal single-vehicle crash by about half and the risk of a fatal rollover by as much as 80 percent (1)

Technology standard on all new models since 2012
$6.88
Blind spot warning Provides area awareness to drivers using radar-based sensors and bouncing electromagnetic waves off nearby vehicles to determine whether alert condition exists; if it does, warning lights are illuminated Technology valuable in identifying nearby/approaching vehicles (2)
NHTSA has not set performance specifications for this feature, but recognizes it as a promising technology (1)
None
Collision preparation system Alerts driver when vehicle is about to collide with another using flashing light, alarm sound or vibration Meet NHTSA’s performance specifications; recommended feature when shopping for a vehicle (1) None
Driver alertness monitoring Issues and monitors visual or audible signals to and from driver to determine driver alertness and determines appropriate actions Study of commercial vehicles indicates driver alertness monitoring systems could aid passenger vehicle drivers (3) None
Head-up display (HUD) Projects content into the driver’s field of view to help process front and peripheral roadway environments more quickly Because humans have difficulty simultaneously processing two visual displays overlaid on each other, the distraction potential of HUD must be further investigated (1) None
Lane departure warning (LDW) Uses cameras to monitor lane markings and alert drivers when they drift from lanes without a turn signal Technology valuable in helping prevent lane-departure crashes (2)
Meets NHTSA’s performance specifications; recommended feature when shopping for a vehicle (1)
None
Night vision Heightens driver awareness and extends perception through use of LiDAR (lasers which create 3D images of vehicle’s surroundings), infrared, thermographic cameras, or other technologies NHTSA preparing study to investigate effectiveness in eliciting appropriate driver avoidance behaviors without impeding vision of other drivers (1) None
Parking assistance Helps drivers guide vehicles into parking spaces (often parallel parking) using sensors to detect curbs, vehicles, and other stationary objects Technology valuable in helping reduce backing crashes (2)
Recommended feature when shopping for a vehicle (1)
None
Rear-view camera Provides image of area behind vehicle either in dashboard or small display in the rearview mirror; Has 10-ft. by 20-ft. field of view directly behind vehicle As of May 2018, all new vehicles under 10,000 lbs. must include this technology to reduce risk of fatalities and serious injuries caused by backover accidents;
Meets NHTSA’s performance specifications; recommended feature when shopping for a vehicle (1)
None
Passive disabling device (Anti-theft) Disables vehicle by making the fuel, ignition, or starting system inoperative; does not require separate manual action to re-engage Recommended for making vehicles more difficult to steal or easier to trace and recover (1) $9.60
Tracking device (Anti-theft) Features electronic transmitters which emit signals to police when vehicle is reported stolen Effective in recovering stolen vehicles (1) $7.53
Active disabling device (Anti-theft) Disables vehicle by making the fuel, ignition, or starting system inoperative; requires separate manual action to re-engage Recommended for making vehicles more difficult to steal or easier to trace and recover (1) $5.38
Audible alarm (Anti-theft) Motion or impact sensors trigger 120-decibel alarm which can be heard at least 300 ft. away Effective in preventing thefts, burglaries and vandalism (1) $5.04

 

1 NHTSA
2 IIHS
3 Federal Highway Administration

 

Three of four drivers say the advanced safety tech features in their cars are useful. (2018 AAA Survey)

 

 

Drivers See the Value of Safety and Security In-Car Tech

As we've seen, agencies and institutions have studied new car technologies and validated their effectiveness in keeping vehicles (and their drivers) safer and more secure. And car manufacturers haven't hesitated to advertise the safety benefits (and awards and vanity metrics and so on) in order to sell consumers on their safety value. So have drivers opted in? Do they want the advanced safety and security technology offered in cars today?

 

1. They see the safety and security risks.

Tragically, we probably all know someone who was killed in a car crash. Traffic fatalities in the U.S. reached 37,461 in 2016, up 5.6% from 2015 (NHTSA).

And we’re even more likely to know someone whose car was stolen — maybe it even happened to you. More than 765,000 motor vehicles were stolen in the U.S. in 2016, up 7.4% from 2015 (FBI).

 

2. They want to use tech to mitigate those risks.

J.D. Power's 2017 U.S. Tech Choice Study of more than 8,500 consumers revealed that the vehicle technology they’re most interested in includes smart headlights, camera rear-view mirrors, emergency braking and steering systems, lane change assist, camera side-view mirrors, and advanced windshield displays.

A 2018 AAA survey of more than 1,200 owners of vehicles equipped with advanced driver assistance systems (ADAS) revealed that more than 75 percent found the technology (which included forward collision warning, blind spot monitoring, and lane departure warning, among others) useful. Two-thirds said they trust the advanced tech features in their cars, and even more said they would want the tech in their next vehicles and would recommend it to others.

 

3. They believe they'll be rewarded by their insurers.

According to a survey The Zebra conducted among 1,165 drivers, 54% of respondents were under the impression that in-car anti-theft technology would impact their car insurance rates and 46% said the same of in-car safety technology. Further, when asked which single factor about their car had the greatest impact on insurance rates, nearly 10% of drivers said having anti-theft technology in their vehicles would have the greatest impact on their auto insurance rates and 7.4% said safety technology would.

 

Since Americans know cars are dangerous (and that they get stolen), and since many would opt to take proactive measures and purchase vehicles with helpful technology to prevent crashes and theft... shouldn’t insurance companies reward that behavior?

 


KEY FINDING 3

4 Reasons Insurance Companies Aren't Lowering Rates for Safer and More Secure Cars

 

Bumper Damage Cost

 

1. New car technology makes cars more costly for insurers to repair and replace.

New cars are the safest on the roads, but that safety comes at a financial cost. Consider that tech features like collision preparation systems or blind spot monitoring require sophisticated sensors in the vehicle’s bumper. When damaged in a crash, the bumper with the sensors would incur much more costly claims for an insurance company than a typical bumper.

 

2. Technology doesn’t necessarily negate driver error.

Despite cars getting safer, our driving is getting more dangerous. Since the new safety devices don't make your car "driverless," there is still a lot of room for driver error.

AAA’s study reveals how drivers may tend to depend on these technologies beyond their intended purpose:

“Nearly half of all respondents with [blind spot monitoring technology (BSM)] reported that they at least ‘rarely’ rely solely on their BSM and do not perform a visual check of their blind spot before changing lanes, including 11% who admitted solely relying on the BSM 'often' or 'frequently. Similar findings were observed with … [lane departure warning (LDW)], with some respondents indicating that they were more comfortable looking away from the road because of the LDW system, and 13% of respondents said that they felt comfortable looking away from the road 'sometimes,' 'frequently' or 'often' [with adaptive cruise control enabled]. As drivers become more comfortable with these technologies, the possibility for overreliance on these systems could grow.”

Some drivers even deactivate certain technologies like beeping from lane departure warning because they find them “annoying.”

And many features — like a heads-up display, for example — also create additional distractions for drivers, leading to some debate about whether these features should be used in cars or not.

 

3. There’s insufficient data about the technology.

Insurance companies maintain that there is not currently enough verified data for them to determine if these new in-car technology features truly lower the risk of a crash.

The AAA survey concludes that a greater understanding of how drivers perceive and use advanced vehicle technology is needed for successful broad implementation.

“It is imperative to understand how drivers develop their mental model of these systems and how their experiences with different implementations of the technologies affect their opinions, attitudes and experiences. Improved driver understanding and effective usage will increase the likelihood that ADAS technologies’ safety benefits are translated to American roadways.”

 

4. The potential discount depends on the type of coverage you have.

Theft falls under comprehensive coverage, just like damage from hail, fire, flooding, etc., so since a car alarm does not prevent or decrease the likelihood of other comprehensive claims, the discount is minimal. Further, if you opt not to include comprehensive coverage on your policy (as it’s generally not required unless you’re financing a vehicle), you would not receive any anti-theft discount as it would apply only to the comprehensive portion of your premium.

Similarly, safety feature discounts would apply only to a specific portion of your premium — personal injury protection (PIP) or medical coverage, which covers the driver’s and his/her passengers’ medical bills if hurt in a collision. PIP is only required in 15 states, so those opting out of it would see no insurance premium discount for using safety tech features.

So when insurance companies advertise a 10 or 20% discount for having a certain tech feature, keep in mind that that 10 or 20% only applies to part of your premium.

 


CONCLUSION

What Can Drivers Do?

  1. Make sure to inform your insurance company about any anti-theft or safety devices your car has whenever you shop around or renew your policy as new discounts might become available.
  2. Buy cars with safety and anti-theft technology. (Just because we’re exploring why they might not impact insurance rates doesn’t mean the tech safety features can’t save your life!) You may also prevent costly claims from injuries, vehicle damage, or theft, which helps keep your rates from rising.
  3. Shop for insurance every six months to a year to ensure that you and your vehicle are appropriately covered — and to see what new discounts might apply.

For more data, check out The Zebra's State of Auto Insurance Report.
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