We all know that standard safety features like seatbelts and airbags can help keep drivers and passengers safer by reducing damage caused by collisions. Modern safety features can make vehicles even safer by reducing the risk of human error while driving.
However, it can be difficult for insurance companies to determine how effectively specialized safety equipment can prevent collisions and reduce the cost of any resulting claims.
While many factors can raise and lower your car insurance premiums, let’s investigate how different safety features can affect your insurance bill and how the benefits of a safer drive relate to the cost of insuring your car.
Do safety features lower car insurance?
The answer to this question is more complicated than a simple “yes” or “no.” In general, the more effective and inexpensive a safety feature is, the higher its potential to lower your insurance rates. However, not receiving a direct discount for a particular safety feature doesn’t mean it’s not worth its cost.
Say your car uses a system of sensors and cameras to provide you with:
- Blind-spot monitoring assistance.
- Rear and front cross-traffic alerts.
- Collision and lane departure warnings to help keep you from colliding with another vehicle, pedestrian or stationary object.
- Technology that can take control of your steering wheel and brake to avoid an impact.
Despite generally promoting safer driving, these types of safety systems currently aren’t likely to convince your insurance provider to charge you less for auto insurance because they are expensive to repair or replace if they malfunction or break.
We’ll discuss this dilemma below, but first, let’s take a look at the safety features that are most likely to save you money on your auto insurance policy right now.
Safety Features That Will Lower Car Insurance Costs
Every insurance company will have different requirements for vehicle safety features that are eligible for discounts. It’s important to discuss these with your insurer to ensure you’re paying the lowest possible price for your policy.
- Winter tires: The right tires are necessary for safe winter driving in Canada. Talk to your insurer about when you need to install winter tires to qualify for a discount.
- Anti-theft systems: Your insurer might offer a discount for approved vehicle security systems and devices such as an electronic alarm or a steering wheel lock.
- Dash Cams: Dashboard cameras won’t give you a direct insurance discount. However, dash cams can help you save on insurance by proving you were not at fault for an accident, helping you dispute a traffic ticket, or confirming you were the target of insurance fraud.
While adding these safety features can help you save on coverage, the type of vehicle you drive is crucial in calculating how much you pay for insurance.
For example, insurers consider the frequency with which different vehicle makes and models are stolen to calculate your premiums. Therefore, driving a car that’s less likely to be stolen can help you save on insurance rates and reduce your chances of experiencing vehicle theft.
New vehicles are also generally safer and less likely to break down. So driving a newer, moderately-priced model with a high safety rating can help reduce your premiums.
Are vehicle safety features reducing collisions?
There is growing evidence that modern vehicle safety advancements can help reduce accidents and insurance claims in certain cases.
A 2021 LexisNexis Risk Solutions white paper identifies eleven core features of advanced driver assistance systems (ADAS) that impact accident claim frequency and severity the most:
- Adaptive cruise control
- Adaptive headlights
- Blindspot warning and mitigation
- Driver monitoring
- Forward collision warning and mitigation
- Lane departure warning and mitigation
- Rear collision warning and mitigation
Drivers of automobiles with ADAS made 23%, 14% and 5% fewer bodily injury, property damage and collision claims, respectively.
The vehicles studied with advanced driver assistance systems also showed a 23% reduction in the cost of bodily injury claims, a 14% decrease in the price of property damage claims, and an 8% reduction in the cost of collision claims compared to non-ADAS equipped vehicles.
These results indicate that claims might be less expensive for drivers of ADAS-equipped vehicles because when an accident occurs, these systems can help warn drivers and implement automated responses that reduce the damage caused by a collision.
Additional proof that blind-spot monitoring systems help prevent accidents comes from findings in an Insurance Institute for Highway Safety study. The research found that when compared with vehicles without blind-spot monitoring, vehicles with blind-spot monitoring systems were 14% less likely to be involved in a crash and 23% less likely to be involved in a collision resulting in injuries.
While these findings are promising in determining a link between ADAS technology and vehicle safety, the insurance industry still needs time to understand the connection between new vehicle safety features, accident frequency, and the cost of claims for different categories of vehicles.
How do vehicle safety features affect car insurance premiums?
As discussed earlier, the relationship between a vehicle’s safety features and its insurance premiums can be complex. While a safer ride can help you save money by reducing the likelihood of an accident, pricey safety equipment can increase the cost of repairing your vehicle, leading to higher premiums.
It’s important to note that the LexisNexis research also found that the combination and number of advanced safety features a vehicle has combined with its price also impact accident claim severity. For example, more expensive cars with the most ADAS features listed above tend to make more minor insurance claims. In contrast, vehicles with a manufacturer’s suggested retail price (MSRP) lower than twenty-five thousand U.S. dollars make more expensive insurance claims on average.
“e.g. ADAS Collision claim severity was 8% higher on vehicles less than $20K MSRP). However, ADAS vehicles with higher MSRPs have lower. Collision claim severity relative to non-ADAS (e.g. ADAS claim severity was 12% lower on vehicles with $60-$80K MSRP).” (LexisNexis Risk Solutions, The impact of Advanced Driver Assistance Systems (ADAS) on insurance claims, 2021).
Less expensive vehicles involved in an accident are more likely to be written off when equipped with costly to repair advanced safety equipment.
For example, suppose a car’s value has depreciated to five thousand dollars and requires a several thousand dollar repair bill after a moderate accident. In that case, it could be cheaper to replace the vehicle than fix or replace its safety systems. Assuming the driver has collision coverage, this could be a significantly higher claim for ADAS vehicles than non-ADAS vehicles requiring less expensive repairs.
While the ability of modern safety features to help keep drivers and pedestrians out of harm’s way should be emphasized, in some cases, they’re also associated with more expensive insurance claims when accidents occur.
Will vehicle safety technologies make car insurance less expensive over time?
Evidence suggests that modern vehicle safety systems can make driving safer. As more research backs up these findings and the technology used for advanced driver assistance systems becomes more affordable to install and repair, insurance companies may begin to offer discounts.
It’s always wise to compare quotes from multiple insurers to get the best price for the coverage you need. However, even if you can’t get a discount for your vehicle’s safety features, they can still make your insurance cheaper over time by helping you avoid accidents that would otherwise hike up your rates.
Advanced driver assistance systems can help drivers with potentially hazardous tasks like backing up in a crowded parking lot or changing lanes, especially those driving larger vehicles with more significant blind spots.
In the absence of insurance discounts, it’s still important to emphasize the safety benefits that ADAS can provide in addition to their ability to reduce driver stress. However, when it comes to staying safe on the road, vehicle safety features aren’t a substitute for being a good driver. Moreover, safe drivers with good driving histories and a car without high-tech safety equipment will pay less for their insurance than high-risk motorists operating ADAS-equipped vehicles.
Auto insurance providers aren’t ready to offer a discount for every new safety feature on the market, but savings may become available in the future. Talk with your insurance broker about currently available discounts and how a new vehicle purchase can impact your rates to ensure you’re paying the best price for your coverage.