(Greg Horn is vice president of industry relationsfor Mitchell International. Previously, heserved as vice president of materialdamage claims at GMAC Insurance.)

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" weresuch high-tech features as four-way emergency flashers and adriver's side door mirror. While these did have a marginal impacton accident avoidance, they added little to the overall cost ofrepair 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. 

Parking and blind spot sensors are a goodexample of technology that will lower claims frequency butcontribute to higher claims severity. Carmakers are making them astandard feature of all vehicles going forward. Parking sensors arelocated in the rear bumpers or the outside mirror of a vehicle.That's ideal to both detect and prevent accidents before theyhappen, but also well-placed to receive the brunt of the damage.These sensors might mean fewer fender benders but those that dooccur will be more expensive and complex to repair. 

High-Tech Rides
It is estimated that some 70percent of 2011 vehicles are equipped with these technologies,which means a lot of auto claims involving some aspect oftelematics technology will be coming your way. You might think onlyluxury vehicles like Volvo are equipped with the likes of thesehigh-tech systems. It is true that Volvo has pioneered technologyin the accident avoidance arena for several years now, particularlyadvanced driver assistance systems (ADAS) like autonomous emergencybraking (AEB) as part of its City Safety system. Since 2010, Volvohas outfitted the XC60—as known as "the car that stops itself"—withthis system, which is designed to address commonly-occurringlow-speed, front-into-rear accidents like tailgating. 

AEBs use a group of sensors—radar, light detection and ranging(LIDAR) 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 fromthe distracted driving epidemic where it seems almost every driveris tempted to text and tweet via smartphones.

Some systems will first emit an 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 percent less often for the XC60 with City Safetycompared to other midsize luxury SUVs. HDLI performed a similarstudy in the U.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.

The Effect on Claims Handling
There's nodoubt that telematics are changing both the industry and how autoclaims are handled. Leveraging telematics data can potentiallyshorten the claims investigation by providing vital clues todriving behavior immediately prior to impact. They can also helpassess driver behavior and therefore driver risk. This will providefor 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 be around$80. But replacing an outside remote mirror with blind spot sensorcan be over $800. In addition, today's telematics systems such asAEBs and other accident avoidance systems can cost upwards of$2,200. 

Finding Answers
Collision repairers aretaking full advantage of educational opportunities, includingonline classes that can be attended during down time or scheduledin, many companies are offering the same options for collisionclaims handling. Companies are also taking the time to maketelematics part of industry updates to employees. Other resourcesinclude schools and associations that offer courses and seminarsthat are claims-focused. 

There are also blogs and social media sites that have telematicscontent you can check out on your smartphone. Just not whiledriving, okay?