While attending a recent car show, I came across a reproductionwindow sticker displayed in a mint-condition 1966 Mercury Marauder.Full-size Mercuries from the 1960s are some of my favorite cars, soI spent a lot of time examining this one.

What caught my eye on the window sticker was the list ofstandard equipment. Under the subheading “safety equipment”were such high-tech features as four-way emergency flashers and adriver's side door mirror. While these did have a marginalimpact on accident avoidance, they added little to the overall costof repair if damaged in a collision.

In today's world, safety equipment is a lot flashier andaccident-avoidance technology has advanced exponentially. Itincludes a combination of:

• Telematics, a broad range of technology thatcombines mobile/broadband telecommunications and computing thatproduces raw vehicle data, which is overlaid with GIS map data likeroad type and speed limits.
• Black box technologies like on-boarddiagnostics parameter IDs (OBD-II PIDs codes that request data froma vehicle and are used as a diagnostic tool).
• Event data recorders (EDRs) that developed outof vehicle air bag technology.

The impact of these advances on automotive claims is and willcontinue to be significant. While accident avoidance technologieshold the promise of reducing crashes and the frequency of claims,the complex technologies in place in the modern automobile havegreat potential to increase claims severity.

Blind spot and parking sensors are a good example of technologythat will lower claims frequency but contribute to higher claimsseverity. Carmakers are making them a standard feature of allvehicles going forward. Parking sensors are located in the rearbumpers or the outside mirror of a vehicle. That's ideal to bothdetect and prevent accidents before they happen, but alsowell-placed to receive the brunt of the damage. These sensors mightmean fewer fender benders but those that do occur will be moreexpensive and complex to repair.

How many cars have this technology?

It is estimated that some 70 percent of 2011 vehicles areequipped with these technologies, which means a lot of auto claimsinvolving some aspect of telematics technology will be coming yourway. You might think only luxury vehicles like Volvo are equippedwith the likes of these high-tech systems. It is true that Volvohas pioneered technology in the accident avoidance arena forseveral years now, particularly advanced driver assistance systems(ADAS) like autonomous emergency braking (AEB) as part of itsCity Safety system. Since 2010, Volvo has outfitted the XC60 (aka“the car that stops itself”) with this system, which is designed toaddress commonly-occurring low-speed, front-into-rear accidentslike tailgating.

AEBs use a group of sensors— Radar, Lidar (light detection andranging) or camera-based—to monitor the road ahead and identifypossible collisions. AEBs can play a major role in ourtech-saturated society because they can provide some relief fromtoday's distracted driving epidemic where almost every driver istempted to text and tweet via smartphones.

Some systems will first emit a audio, visual or haptic warning.(With a haptic system, when the sensor detects an imminentcollision it issues both audio and visual warnings to the driver.If the driver does not respond, then the brakes areautomatically applied.) So compelling is the case for accidentavoidance that the European Commission recently passed legislationrequiring that all vehicles for sale in the European Union have AEBas standard equipment by the 2014 model year.

The data that convinced European lawmakers came from Thatcham,Europe's leading authority in collision repair research, whichperforms research similar to our Highway Loss Data Institute(HLDI). Thatcham performed a side-by-side study of the Volvo XC60midsize SUV. Half were equipped with City Safety and half were not.The study concluded that property damage liability coverage claimswere filed 27% less often for the XC60 with City Safety compared toother midsize luxury SUVs. HDLI performed a similar study in theU.S. and came to a similar conclusion.

While Volvo is known to be a leader in this area, othercarmakers outside the luxury segment such as Honda, Toyota,Volkswagen and Ford are also offering these systems in somecapacity. Most offer them as trim options, but Ford is making thistechnology available to masses of blue oval drivers. Ford's ActiveCity Stop system, which was developed when Ford owned Volvo, is nowoffered as an option on the new Ford Focus—bringing AEB technologyto millions of drivers. Active City Stop is just one portion of thecompany's tech-packed driver assistance option, which also includesa lane departure warning, a lane keeping aid, driver alert, autohigh beam, traffic sign recognition and a blind spot informationsystem. And how do all of these systems work? In a word:sensors.

The result is that while there is a great deal of potential foradvanced accidence avoidance technologies to decrease auto claimfrequency, claim severity will correspondingly rise, due in largepart to all of the sensors involved in making these systems tick.Sensor placement also plays a large role in this claimfrequency/severity dynamic, as many of these sensors are placed inbumpers where most collision damage occurs. The countless collisionclaims resulting from common, everyday low-speed collisions makereturning a vehicle to pre-accident condition even more complex,and pricier as well.

How do sensors and other accident avoidance technologiesaffect claims handling?

There's no doubt that telematics are changing both the industryand how auto claims are handled. Leveraging telematics data canpotentially shorten the claims investigation by providing vitalclues to driving behavior immediately prior to impact. They canalso help assess driver behavior and therefore driver risk. Thiswill provide for more accurate underwriting and policy pricing.

In the meantime, on the front lines of claims handling, claimsprofessionals must become familiar with the changed claimsfrequency/claims severity dynamic that advanced accidenttechnologies have caused. The risk for auto claims handlers andtheir claims handling operations is that unfamiliarity with the newinner workings of vehicles and their accident avoidance meansignorance as to the real cost of time and labor needed to return apolicyholder's vehicle to pre-accident condition.

Accident avoidance systems are costly to repair. Take forexample that outside mirror on the 1966 Mercury. Back in the day,it cost $16.75 to replace. In today's dollars, that would bearound $80. But replacing an outside remote mirror with blindspot sensor can be over $800. And today's telematics systemssuch as AEBs and other accident avoidance systems can cost upwardsof $2,200.

Where can you find answers?

Just as collision repairers are taking full advantage ofeducational opportunities, including online classes that can beattended during down time or scheduled in, many companies areoffering the same options for collision claims handling. Companiesare also taking the time to make telematics part of industryupdates to employees. Other resources include schools andassociations that offer courses and seminars that areclaims-focused.

Believe it or not, there are also blogs and social media sitesthat have telematics content you can check out on your smartphone.Just not while driving, okay?