Modern vehicles' advanced driver safety systems may greatly lower collision risks, but can cost in other ways
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As vehicle safety systems have continued to improve, the drivers and passengers in those vehicles have become increasingly safer. The emergence of Advanced Driver Safety Systems (ADAS) is changing the playing field for drivers and insurers alike, and as summed up in this Autosphere article, “in the collision repair industry, there has been, for some time a great deal of interest in the correlation between vehicles equipped with Advanced Driver Assistance Systems (ADAS) features and auto insurance claims.”
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LexisNexis recently released a white paper digging into how these systems are contributing to reducing collisions, reducing personal injury and in turn, the impact of those reductions on the amount of insurance you pay if your vehicle is so equipped.
What are we actually talking about when we refer to ADAS systems? The study includes the following on its list of advanced features:
- Adaptive Cruise Control
- Forward Collision Mitigation
- Adaptive Headlights
- Lane Departure Warning
- Blind-Spot Warning
- Lane-Departure Mitigation
- Blind-Spot Mitigation
- Rear Collision Warning
- Driver Monitoring
- Rear Collision Mitigation
- Forward Collision Warning
These features have been tapped for inclusion because they “ have improved automobile safety by minimizing the factor most frequently associated with car accidents — human error,” according to LexisNexis . These technologies are the emerging frontier of autonomous cars; we will not be getting autonomous cars any time soon, but these are the stepping stones to getting us there.
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And if the whole point of autonomous cars is to remove driver error from the equation – by far the most overwhelming factor in everything that goes wrong – then it’s reasonable to assume fewer crashing cars should lead to plunging insurance rates. No damages, no injuries, no payouts. Right?
Sort of. In theory. Maybe. The paper notes it saw a “ 23-per-cent reduction in Bodily Injury loss cost; 14-per-cent reduction in Property Damage loss cost; and eight-per-cent reduction in Collision claim loss cost in ADAS-equipped vehicles compared to non-ADAS vehicles.”
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That long list of ADAS systems they considered in the study led to a root system of factors to untangle, however. All things are not equal in the land of ADAS. “If we compare the raw claim severity data across different MSRP bands, we see vehicles with lower MSRP values tend to have higher Collision claim severity with ADAS (e.g. ADAS Collision claim severity was eight per cent higher on vehicles less than $20K MSRP). However, ADAS-equipped vehicles with higher MSRPs have lower Collision claim severity relative to non-ADAS-equipped cars (e.g. ADAS claim severity was 12 per cent lower on vehicles with a $60K to $80K MSRP). It is easy to see that in trying to determine the severity.”
The more costly your vehicle, it seems, the more likely it will suffer less damage if equipped with ADAS systems. Does that mean cheaper cars so equipped are not safer? No. It points to the many duelling factors in trying to unknot this chain. Chris Wood is a certified auto body specialist, currently with Leon’s Auto Body in Toronto. With over 18 years of experience in repairing the broken, the bashed and the blemished, he’s the guy you bring your highest-end cars to so you can pretend it never happened. I asked him if the advanced technologies that warn – and save – drivers are changing what he’s seeing come through the door.
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“ We see fewer structural repairs and more minor ones with so-equipped new vehicles, and when I speak to clients the overall response is they were warned and or notified of the potential collision and had time to react to minimize the damage or injury,” he says. Even more interesting from an insurance angle, he says “I am seeing more vehicles coming into Leon’s with a lower percentage of their drivers being found at fault.”
Fewer crashing cars should lead to plunging insurance rates — no damages, no injuries, no payouts, right? Sort of
So why the higher claims on the lower-end vehicles? “The insurance companies look at the type of vehicle and set your rate based on your record, but also based on how new and safe your vehicle is, and what type of safety systems it has,” says Wood. “Once a vehicle is in a collision the components of the system may be damaged – front radar, cameras, sensors, etc. – and this all adds up. In many cases, the vehicle may be a total loss due to the cost of the replacement of those components.” This is the other end of the teeter-totter for insurance companies: modern safety systems may be reducing contact and claims, but when cars do connect, the cost to repair or replace those same systems is significantly higher. On a cheaper car, that might lead to more write-offs instead of costly repair.
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The study illustrates what the insurance industry is currently struggling to get a handle on. “ The Collision distribution shows that while most (34 per cent) ADAS feature combinations resulted in a zero to five per cent Collision loss cost reduction, some (five per cent) combinations had as much as a 20- to 25-per-cent Collision loss cost reduction,” it reads. “Conversely, five per cent of combinations resulted in a five- to 10-per-cent Collision loss cost increase, so it is important to understand the impact of each combination of ADAS features for rating purposes.”
It shows why it may be premature to expect that the industry reward safer cars (as opposed to drivers; remember, these systems are meant to take them out of the equation) with lower rates. Smaller claims and fewer payouts should lead to those savings, but the repair costs, when they do occur, are on more expensive systems.
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A currency that definitely needs to be factored in is the human one. Wood points to the huge increases in passenger safety. Manufacturers are tasked with not only developing vehicles that protect their occupants in the event of a collision, but will keep them out of a collision in the first place.
There’s been an explosion of materials that are lightweight to deliver the best fuel economy, yet strong enough to withstand the most violent situations. I don’t think I’ve seen a better testament to how far car design has come than the recent picture of a Nissan Altima trapped beneath a transport on a Washington highway recently. The woman crawled out and walked from the wreck.
Wood also notes an increase in “wow, they walked away from that!” moments. More importantly, he is a huge proponent of older drivers getting into newer vehicles, noting that it’s important to find the balance between “but it’s a perfectly good car” versus “this newer one could be the one that saves your life.”
Safety at all costs — but there will be a cost.
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