While attending a recent car show, I came across a reproduction window sticker displayed in a mint-condition 1966 Mercury Marauder. Full-size Mercuries from the 1960s are some of my favorite cars, so I spent a lot of time examining this one.
What caught my eye on the window sticker was the list of standard equipment. Under the subheading “safety equipment” were such high-tech features as four-way emergency flashers and a driver’s side door mirror. While these did have a marginal impact on accident avoidance, they added little to the overall cost of repair if damaged in a collision.
Blind spot and parking sensors are a good example of technology that will lower claims frequency but contribute to higher claims severity. Carmakers are making them a standard feature of all vehicles going forward. Parking sensors are located in the rear bumpers or the outside mirror of a vehicle. That’s ideal to both detect and prevent accidents before they happen, but also well-placed to receive the brunt of the damage. These sensors might mean fewer fender benders but those that do occur will be more expensive and complex to repair.
How many cars have this technology?
The data that convinced European lawmakers came from Thatcham, Europe’s leading authority in collision repair research, which performs research similar to our Highway Loss Data Institute (HLDI). Thatcham performed a side-by-side study of the Volvo XC60 midsize SUV. Half were equipped with City Safety and half were not. The study concluded that property damage liability coverage claims were filed 27% less often for the XC60 with City Safety compared to other midsize luxury SUVs. HDLI performed a similar study in the U.S. and came to a similar conclusion.
While Volvo is known to be a leader in this area, other carmakers outside the luxury segment such as Honda, Toyota, Volkswagen and Ford are also offering these systems in some capacity. Most offer them as trim options, but Ford is making this technology available to masses of blue oval drivers. Ford’s Active City Stop system, which was developed when Ford owned Volvo, is now offered as an option on the new Ford Focus—bringing AEB technology to millions of drivers. Active City Stop is just one portion of the company’s tech-packed driver assistance option, which also includes a lane departure warning, a lane keeping aid, driver alert, auto high beam, traffic sign recognition and a blind spot information system. And how do all of these systems work? In a word: sensors.
How do sensors and other accident avoidance technologies affect claims handling?
There’s no doubt that telematics are changing both the industry and how auto claims are handled. Leveraging telematics data can potentially shorten the claims investigation by providing vital clues to driving behavior immediately prior to impact. They can also help assess driver behavior and therefore driver risk. This will provide for more accurate underwriting and policy pricing.