With the rise of intelligent driving systems, it’s natural to wonder if they will affect your auto insurance rates. After all, you can expect these intelligent driving systems to lower the risk of an accident, and insurance premiums are based on risk.
But what is the truth behind their impact on insurance rates?
If you take a long-term view of auto insurance and intelligent driving systems, then yes, there is a good chance that rates will decrease. Of course, this would likely require most people to use fully autonomous cars.
The reduction in rates would be caused by a decrease in road accidents. Autonomous cars would follow driving laws, be less likely to speed and triangulate their location with other autonomous vehicles to avoid accidents.
But there’s a big caveat here: We are not close to this point yet. For these lower rates to happen thanks to intelligent driving systems, the systems would have to be much more advanced and in wider use than they are now.
Today there are only a handful of self-driving cars, and even those have limitations. More drivers around you need these features as well, or the risk will remain high.
Even if you have an auto with advanced safety and driver-assistance features or one that has a fully intelligent driving system, you aren’t likely to see a significant difference in your insurance rates. Some providers may offer a slight discount for certain technologies, but these discounts vary and aren’t always easy to obtain. On top of that, the discounts are usually fairly small, about $20 or less a year.
There are a few important reasons that these intelligent driving systems don’t have a larger impact on insurance rates:
- Not Enough Data. To start, there simply isn’t enough data on these systems to conclusively prove that they make driving safer. Until we have more data on how drivers use the technology and how it has affected overall collision rates, insurance companies aren’t going to offer discounts. After all, insurance companies are for-profit businesses, and they want a good reason for actions that affect their bottom line.
- The Tech Is Expensive. Another major factor is that the technology behind intelligent driver systems is expensive. If you are in an accident and the technology gets damaged, the repair bill will be much higher than it would be for an auto without that technology. So, even if the risk of a collision decreases, the cost of collisions that do occur increases. These factors somehow balance each other out or even lead to a rise in costs.
- Driver Error Is Still a Risk. Unless you are talking about a fully autonomous auto, existing advanced systems still have to deal with driver error. Drivers must use the information the systems give to them, and human error can cause issues here. From ignoring the systems to over-relying on them, multiple risks are involved.
For now, intelligent driving systems are not significantly lowering insurance premiums. You may save a few bucks a year, but driver error is still a concern, as is the high cost of the systems. In the long run, autonomous vehicles may lower insurance premiums, but that's a long way off.
Cedric Jackson (pictured, left) is a freelance writer.