Over the past 25 odd years, technology has had a significant and positive impact on road safety.
Tech, such as airbags and blind-spot monitoring, has decreased automotive-related deaths by more than 30%. The downside to this is that technologically enhanced car parts are more expensive to replace. Unfortunately, this results in car insurance premiums going up instead of down.
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Vehicle Insurance Needs
As new opportunities arise from technological advances, insurance companies have to amend their policies to provide for their consumers’ needs.
For instance, ride-sharing companies such as Uber did not exist a couple of years ago. These apps’ popularity has resulted in more drivers using their vehicles to make a living or earn some extra cash on the side. These drivers’ insurance needs will obviously differ from those for people who use their cars for personal purposes.
It is said that high tech devices make drivers safer and reduce accidents. This, though, raises the question if it also adds to distracted driving. Specific gadgets such as smartphones, touchscreens, built-in GPS, and TVs can quickly draw the driver’s attention away from the road.
Recent studies revealed that people who text while driving are 23 times more likely to cause accidents.
All is not lost, though. Insurance companies now have the opportunity to use technology to add brand value and better engage with their clients. For example, certain tech advances can be used to track people’s driving. Good and accident-free driving can then be rewarded with discounted premiums.
What Will Be The Effect Of Autonomous Vehicles
It is estimated that more than 90% of accidents result due to human error. For this reason, manufacturers like Tesla are researching autopilot and automated vehicles. Unfortunately, exact figures of how this will affect road safety are not yet available.
Data will also continuously be generated by these cars’ driving programs, which might very well lead to personalized insurance rates and policies tailored to suit your driving style and needs.
Self-driving vehicles have raised the question of liability, though. Traditionally, the insurance company of the party found to be at fault would be held liable for the damages incurred during an accident. But if there is no driver involved, it complicates matters. Insurance brokers will need to restructure their policies on compensation and find new ways of pointing out who or what is at fault.
Another interesting point of discussion is how self-driving vehicles will affect user consumption. Will it result in more cars on the road, or will car-sharing services result in less traffic? Regardless of the outcome, one thing is for sure. The sophisticated operating systems of self-driving cars won’t be cheap to repair. This, in return, is bound to have an adverse effect on insurance premiums.
The Future Of Car Insurance
Technology will continue to have a severe impact on auto insurance. With better devices and smarter cars, insurance companies will need to adjust accordingly. How this will affect our pockets, and what the penultimate outcome will be is yet to be seen.