IoT and ADAS Lowering Automobile Insurance

Advanced driver assistance systems (ADAS) and IoT connectivity are now becoming more and more prevalent in cars and other vehicles. This is good news for car owners. Not only do these systems reduce the chances of an accident, car insurers are now offering lower premiums for cars that are fitted with ADAS.

In the old days, there was no way for insurance companies to know for sure just how safe you were as a driver. So, they relied on statistics and generalizations when setting rates. Factors such as female drivers being thought safer drivers than their male counterparts, certain age groups being considered low risk when it comes to accidents, or your living in a safe neighborhood could all determine what you would pay for insurance premiums. If you are unlucky enough to be part of a group that is considered to be “high risk,” then you pay high insurance premiums, even if you are indeed one of the safest drivers in the world.

With the advent of smart cars and telematics, insurance companies are now able to tailor your insurance premiums to fit based on your driving behavior. Pay as you drive (PAYD) systems tell insurers if you are driving safely. If you are always hard braking, accelerating, changing lanes, and doing things that could indicate that you are driving recklessly, your premiums will be higher.

An advanced driver assistance system (ADAS) can take the power of technology even further in affecting insurance premiums. An ADAS can help you avoid accidents, thereby decreasing the risk that the insurance company would have to pay a claim. Lower risk means lower expenses for insurance providers. As a result, most car owners could pay a lower premium when their cars are fitted with both the latest tech and tools that can help them stay safe and protected while driving on the road.

Great examples of ADAS include lane change assistance, night vision, automatic parking, traffic sign recognition, adaptive light control, blind spot detection, driver drowsiness detection, and hill descent control. All of these technologies help keep you safe on the road. These systems may work differently, but the premise of each one is the same. They are aware of both your car’s environment and what’s going on inside the car through the use of several sensors and software. In addition, these technologies are able to warn the driver about his or her behavior and other things to be aware of in order to correct problems. Otherwise the technology automatically corrects the situation.

These systems can be very effective. A study conducted by German Insurers Accident Research showed that advanced driver assistance systems really do work. Collision mitigation braking systems, for instance, gather data and information from the environment and then warn the driver about possible collisions and accidents. They may also be able to apply the brakes partially on their own. According to the study, these prevented nearly 18% of car accidents in its sample. Lane guidance systems, which help you change lanes safely or stay in your current lane, helped prevent a little more than 7% of car crashes. These two systems alone would help reduce car accident numbers by as much as 25%.

The Insurance Institute for Highway Safety (IIHS) took a look at automatic braking and front crash prevention systems and came up with a rating system that would help you know for sure whether or not you have a good automatic braking system on board your vehicle. For example, a 2013 Toyota Prius fitted with both warning and autobrake systems for forward collision prevention is safer than the 2013 Toyota Camry 4dr, which does not have these options. There are cars that have autobrake systems that do not get a good rating from the IIHS, because these systems failed to reduce car speed significantly to avoid a collision, or at least to lessen the damage.

Apart from the concept that having safer cars equates to lower risks and therefore lower insurance premiums, there are also direct benefits that these advanced driver assistance systems hold for you personally. Cisco reports that systems such as those that monitor the health and maintenance requirements of your engine, monitor driver drowsiness and vitals, offer safe route guidance, and offer active and passive corrections to driving errors can lead to up to 35% fewer crashes. The injury that gets avoided just might be your own.

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