Driverless Cars, Vehicle Technology, and Car Insurance

By: Angelo Ilumba November 3, 2014
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Driverless Cars and New Technology Can Significantly Impact Car Insurance

With the recent news that California has issued several permits to Google, Audi, and Mercedes Benz allowing them to test their driverless cars on public roads, it’s easy to see that the future has arrived. And this new vehicle technology gets factored into car insurance.

Continue reading to learn how new and evolving technologies can affect your auto insurance coverage and premiums.

Driverless Cars

It’s still way too early to know just how safe driverless cars are. The theory is, as vehicle operation relies less on driver skill, human error can be taken out of the picture. However, some point out that computers have to be programmed to respond to every type of situation faced on the road, and the road is too unpredictable to program all possible scenarios.

Car insurance companies understand, though, that technology will keep improving year over year. And if these driverless cars develop the ability to communicate with each other, this would almost completely eliminate collisions and would allow for less congestion on the road with more precise driving.

Still, while the general consensus is that this is possible, if it does happen it is probably many years away.

Semi-Autonomous Cars

One advancement we are already seeing on the roads is semi-autonomous cars.

Computers in these cars can take over in certain situations such as:

  • Parallel parking.
  • Stopping and accelerating in traffic jams.

Semi-autonomous cars, however, still heavily rely on human drivers, and car insurance companies may not view them as significantly increasing vehicle safety.

Ultimately, this means that this new technology will not dramatically affect car insurance premiums. If in the future, driverless technology becomes more common, expect to see a dramatic shift in the car insurance industry.

Collision Warning Systems

This safety feature is starting to be installed in more cars, and the car insurance industry is very excited about it. This is evident in the fact that the Insurance Institute of Highway Safety’s most recent list of the safest cars are topped with vehicles that have collision warning systems.

Collision warning systems do just what they claim: they warn you when you are about to be involved in a collision. A collision warning system will warn you if you are getting too close to another car using the following pieces of technology:

  • Cameras.
  • Sensors.
  • Lasers.

Some of these systems are even programmed to detect if you are about to hit a pedestrian and will brake for you.

Lane Departure Warnings

Similar to collision warning systems, lane departure warning systems track the lines on the road and will warn you if you are beginning to drift out of your lane. Some systems will automatically correct your car, bringing you safely back into your lane.

Collision and lane departure warning systems have a tangible effect on your car insurance premium.

The high safety ratings of cars with collision warning systems says it all. Your car, and its safety rating, is a big factor in determining your premium.

This means that having a collision warning system is very likely to save you money on car insurance. 

Driver Tracking

The ability to track your behavior behind the wheel through your car’s diagnostic system has actually been around for some time. It hasn’t been until recently, however, that auto insurance companies have been using this technology to help determine your rates. 

If you agree to plug in an insurance company’s tracker to your diagnostics system, your insurance company will be able to track your driving behavior and better determine your driving risk factor.

Most insurance companies that offer this service will also offer you a discount simply for plugging in. After some time has passed (usually around 6 months), if your behind the wheel record reflects good and safe driving, you can expect to receive another discount on your car insurance of up to 30%.

While monitoring devices may seem invasive, confident drivers may see the benefit of having their driving habits tracked. Parents may also benefit from tracking habits of their teen drivers and using the record as a teaching opportunity.

Nobody can say for certain where technology is going to take us. It is obvious, though, that carmakers are highly concerned with safety. This forward push for safety may just spark innovations that make accidents a thing of the past, along with high car insurance rates.


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