Learn some great tips on filing an auto insurance claim:
Learn some great tips on filing an auto insurance claim:
Each new generation of cars is equipped with more automated features and crash avoidance technology. Indeed, many of today’s high-end cars and some mid-priced ones already have options, such as blind-spot monitoring, forward-collision warnings and lane-departure warnings. These will be the components of tomorrow’s fully automated vehicles. At least one car manufacturer has promised to have fully automated cars available by the end of the decade.
Except that the number of crashes will be greatly reduced, the insurance aspects of this gradual transformation are at present unclear. However, as crash avoidance technology gradually becomes standard equipment, insurers will be able to better determine the extent to which these various components reduce the frequency and cost of accidents. They will also be able to determine whether the accidents that do occur lead to a higher percentage of product liability claims, as claimants blame the manufacturer or suppliers for what went wrong rather than their own behavior. Liability laws might evolve to ensure autonomous vehicle technology advances are not brought to a halt.
Self-driving cars are definitely on the way, but it may be some time before we are all being conveyed by fully automated vehicles.
Most accidents are caused by human error so if this factor can be minimized by taking control of the moving vehicle away from the driver, the accident rate should tumble. Data from the Institute for Highway Safety (IIHS) and Highway Loss Data Institute (HLDI) already show a reduction in property damage liability and collision claims for cars equipped with forward-collision warning systems, especially those with automatic braking. The exact percentage varied depending on the car manufacturer.
Among the major automakers testing self-driving cars are Audi, Ford, Mercedes, Nissan, Toyota and Volvo. The cars have some ability to travel without the driver intervening but only in certain situations, such as low speed stop-and-go highway traffic. Slow speeds give the car’s computers more time to process information and react.
Experts vary as to when the changeover to self-driving cars will occur. A transport scholar at the University of Minnesota believes that by 2030 every car on the road will be driverless. Driverless shuttles are already being tested on some university campuses in Europe.
An automotive study by IHS, a global information company, titled “Emerging Technologies: Autonomous Cars—Not If But When” forecasts that self-driving cars that include driver control will be on highways around the globe before 2025 and self-driving “only” cars by 2030. Nearly all of the vehicles in use are likely to be self-driving cars or self-driving commercial vehicles sometime after 2050, it says. The study notes two major technology risks, software reliability and cyber-security.
We do not yet know how the driving public will react to the vehicles that come on the market. For most drivers there will be a steady progression from a minimally or semi-automated car to the next level. A Status Report from HLDI suggests that it could take as long as three decades for 95 percent of all registered cars to be equipped with crash avoidance systems. Forward-collision warning systems have been available since 2000, HLDI says, and if they follow their current trajectory, they will not be available in most cars until 2049.
In addition, some people who enjoy driving and do not want control to be taken from them may resist the move to complete automation. Already there are some who say they refrain from using the cruise control feature because they prefer to maintain control themselves.
The risk of an accident is unlikely to be completely removed since events are not totally predictable and automated systems can fail. In addition, the transition from hands-off driving to hands-on promises to be tricky.
The need for drivers to control the car in an emergency is fraught with questions, not just those involved in the automotive technology. What kind of training will people need to safely handle these semi-autonomous vehicles? How well prepared will drivers be to handle emergencies when the technology returns control to the driver? How will beginning drivers gain the necessary experience and how will experienced drivers stay sharp enough when they are only infrequently called upon to react?
Autonomous cars have been compared to airplanes on auto-pilot. But while a pilot and a driver both need to be able to make split-second decisions, there are likely to be fewer times when this skill is called upon in a plane than in a car and, in addition, the pilot is highly trained in how to interact with the automated system.
The Impact on Insurance
Some aspects of insurance will be impacted as autonomous cars become the norm. There will still be a need for liability coverage, but over time the coverage could change, as suggested by the 2014 RAND study on autonomous vehicles, as manufacturers and suppliers and possibly even municipalities are called upon to take responsibility for what went wrong. RAND says that product liability might incorporate the concept of cost benefit analysis to mitigate the cost to manufacturers of claims. Coverage for physical damage due to a crash and for losses not caused by crashes but by wind, floods and other natural elements and by theft (comprehensive coverage) is less likely to change but may become cheaper if the potentially higher costs to repair or replace damaged vehicles is more than offset by the lower accident frequency rate. The number of vehicle-related workers compensation claims, now responsible for a large but decreasing portion of claim costs according to the National Council on Compensation Insurance, should continue to drop as will the share of healthcare and disability insurance costs related to auto accidents.
Regulation: Insurance is state-regulated. Each jurisdiction has its own set of rules and regulations for auto insurance (and so far for self-driving cars). Basically, there are two kinds of liability systems. In some states liability is based on the no-fault concept, where insurers pay the injured party regardless of fault, and in others it is based on the tort system. But there are many important differences among the states in the regulations that now exist within each category, see report on No-Fault Auto Insurance. Will the auto insurance system change to be more uniform with the arrival of self-driving vehicles and will the federal government play a larger role? If car manufacturers are required to accept more responsibility for damage and injuries, they might push for a greater role for the federal government to eliminate some of the cost of complying with the rules of 51 jurisdictions.
Underwriting: Initially, many of the traditional underwriting criteria, such as the number and kind of accidents an applicant has had, the miles he or she expects to drive and where the car is garaged, will still apply, but the make, model and style of car may assume a greater importance. The implications of where a car is garaged and driven might be different if there are areas set aside, such as dedicated lanes, for automated driving.
During the transition to wholly autonomous driving, insurers may try to rely more on telematics devices, known as “black boxes,” that monitor driver activity. Some drivers may object to them based on concerns about privacy. Usage-based insurance policies, which depend on data about the driver’s behavior submitted by an electronic device in the driver’s car, have attracted a smaller than expected percentage of the driving population, possibly because people do not want to be monitored. According to the National Association of Insurance Commissioners, use of telematics is forecast to grow to up to 20 percent within the next five years.
Liability: As cars are become increasingly automated the onus might be on the manufacturer to prove it was not responsible for what happened in the event of a crash. The liability issue may evolve so that lawsuit concerns do not drive manufacturers and their suppliers out of business
RAND has suggested some kind of no-fault auto insurance system. Others foresee something akin to the National Childhood Vaccine Injury Act, a no-fault compensation program for vaccine recipients who suffer a serious adverse reaction when vaccinated. The legislation was passed in 1986 in response to the threat that life-saving vaccines might become scarce or even unavailable if manufacturers, overwhelmed by claims of injury, scaled back or terminated production.
Repair Costs: While the number of accidents is expected to drop significantly as more crash avoidance features are incorporated into vehicles, the cost of replacing damaged parts is likely to increase because of the complexity of the components. It is not yet clear whether the reduction in the frequency of crashes will lead to a reduction in the cost of crashes overall.
Automobile ownership appears to be on the decline, and more people in urban areas are opting for public transportation and shared rides. Some people wonder whether when all vehicles are self-driving anyone will actually own a car. Cars may belong to a company, municipality or other group and may be parked away from the center of the community in a location from which they can be summoned by phone.
A study by the University of Texas at Austin of how the advent of autonomous cars may change vehicle ownership found that each shared autonomous vehicle (SAV) replaced about 11 conventional vehicles. The study assumed that only 5 percent of trips would be made by SAVs. Thanks to iii.org
Activities that take drivers’ attention off the road, including talking or texting on cellphones, eating, conversing with passengers and other distractions, are a major safety threat. The National Highway Traffic Safety Administration (NHTSA) gauges distracted driving by collecting data on “distraction-affected crashes,” which focuses on distractions that are most likely to affect crash involvement such as dialing a cellphone or texting and being distracted by another person or an outside event. In 2012, 3,328 people were killed in distraction-affected crashes and 421,000 people were injured. In 2012, there were 3,050 distraction-affected fatal crashes, about the same as the 3,047 that occurred in 2011. The 3,050 distraction-affected fatal crashes in 2012 accounted for 10 percent of all fatal crashes in the nation, 18 percent of injury crashes and 16 percent of all motor vehicle crashes.
NHTSA says that in 2012, 12 percent of distraction-affected crashes occurred while a cell phone was in use, the same proportion as in 2011. The chart below shows driver hand-held phone use by age.
NHTSA’s website, Distraction.gov has more information on distracted driving. “It Can Wait”, a public awareness campaign funded by four by wireless carriers, provides resources on the dangers of distracted driving, including “From One Second to the Next”, a film by director Werner Herzog profiling the victims of distracted driving. article courtesy of iii.org
If you’re renting a car this summer, you have more choices than ever. What hasn’t changed is the importance of protecting yourself with the right type and amount of insurance, according to the Insurance Information Institute (I.I.I).
Long gone are the days of simply renting a car by the day or week from the closest established rental car company. Now you can rent a car by the hour, from almost any location, or even use a car-sharing service to rent someone else’s personal vehicle.
“When it comes to car rental insurance, the more things change, the more they stay the same,” points out Jeanne M. Salvatore, senior vice president and chief communications officer for the I.I.I. “We have for years recommended consumers make two phone calls before renting a car. One to their insurance professional, and another to the credit card issuer whose card will be used to pay for the car rental. That advice is still spot on and remains the best way to make sure you are properly protected when you rent a car.”
In order to make the best decision regarding your coverage, make these two calls:
To Your Insurance Professional
To Your Credit Card Company
By law, rental companies must provide the state-required amount of liability insurance. Generally, these amounts are low and do not provide much protection.
To read more on your other options click here to visit III.org
Does My Auto Insurance Cover Damage Caused By Potholes?
Sometimes more is more … Minicars and subcompacts fared poorly in the Insurance Institute for Highway Safety’s new and more stringent small-overlap frontal crash test—only one of the 11 models tested recently achieved an acceptable rating. Our backgrounder has more information about the history of the IIHS crash tests and vehicle accidents.
In 2012, 33,561 people died in motor vehicle crashes, up 3.3 percent from 32,479 in 2011, according to the National Highway Traffic Safety Administration.
Motor vehicle crashes are the leading cause of death for individuals between the ages of five and 34 (2010 data).
A motor vehicle death occurred on average every 16 minutes in 2012.
About 92 people died each day in motor vehicle crashes in 2012.
Lives Saved by Safety Devices
The cost and crashworthiness of vehicles as well as drivers’ safety habits affect the cost of auto insurance. Out of concern for public safety and to help reduce the cost of crashes, insurers support safe driving initiatives. It is a major supporter of anti-drunk driving and seatbelt usage campaigns.
The estimated cost of motor vehicle crash-related deaths, injuries and property damage was $276.6 billion in 2012, a 5 percent increase from 2011, according to provisional data in an April 2013 report by the National Safety Council (NSC). The costs include wage and productivity losses, medical expenses, administrative expenses, employer costs and property damage. The number of motor vehicle deaths rose by 5 percent in 2012, according to the NSC. This would mark the first annual increase since 2005. There were an estimated 11.49 motor vehicle crash deaths per 100,000 population in 2012, an increase of 4 percent from the 2011 rate. The estimated annual mileage death rate was 1.23 deaths per 100 million vehicle miles traveled in 2012, an increase of 4 percent from the 2011 rate. (Note: National Safety Council figures are not comparable to National Highway Traffic Safety Administration (NHTSA) figures below. The NSC counts both traffic and non-traffic deaths that occur within a year of the accident, while NHTSA counts only traffic deaths that occur within 30 days.)
According to preliminary data from NHTSA, in 2012, 34,080 people died in motor vehicle crashes, up 5.3 percent from 32,367 in 2011. 2012 marked the first year-to-year increase in motor vehicle crash fatalities since 2005. Vehicle miles traveled in 2012 increased about 0.3 percent, and the fatality rate per 100 million miles traveled is estimated to have increased to 1.16 fatalities, compared with 1.10 fatalities in 2011. NHTSA property damage figures shown below are based on accidents reported to the police and do not include fender bender accidents. courtesy of iii.org
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