Driving to the future: Could safety save on premiums?

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By Amy Bradney-George
4 March 2009

New technology to help prevent drivers from falling in to micro-sleeps could reduce car insurance premiums in the future, according to car insurer Budget Direct.

Cars like the University of New South Wales’ (UNSW) $200,000 Subaru Liberty research vehicle have been designed to monitor driver focus on the roads. The car has additional cameras, monitors and incorporates programs such as ‘Smarteye’ and ‘Optalert’.

Operations Director for Budget Direct, James Lilley, said anything that helps drivers avoid accidents was of interest to them.

“Take for example car alarms and immobilisers – Budget Direct offer discounts for having these installed in your vehicle, so devices like ‘Smarteye’ and ‘Optalert’ which eliminates falling asleep at the wheel could certainly be taken into account.”

In 2008 there were 1463 people who lost their lives through accidents on the roads. While the road toll is lower than it has been in over 50 years, UNSW hopes their research will help reduce fatalities even further.

Cars with the technology to lower the likelihood of accidents due to tiredness will add another element of safety for both drivers and insurers to think about.

Lilley said there were a number of factors insurance companies would have to consider when looking at this type of technology and how it could affect insurance premiums.

“Obviously, any new device would need to be proven to drastically reduce or eliminate a cause,” he said.

As well as rigorous testing by the manufacturers, insurers would have to calculate the amount of claims that could be reduced by the technology.

Statistics from UNSW show that one in five road fatalities are linked to fatigue. So the more effectively this technology alerts drivers to their tiredness, the more potential there is to reduce insurance claims due to fatigue.

Once this happens insurers can start thinking about reductions to insurance premiums for people driving these cars. Cars that have added safety features could end up saving lives and money for people on the road.

But to reduce premiums, safety features would also have to show a significant improvement on current statistics, Lilley said.

“As an insurer, Budget Direct welcomes new technology that can reduce accidents and injury for motorists although these technologies can take years to be introduced and/or measured by the manufacturer.”

In the case of the Subaru’s Liberty, the Injury Risk Management and Research Centre (IRMRC) at UNSW will be using it to conduct a three year study of common driver errors contributing to road accidents.

The vehicle, which earned a five-star ANCAP (Australasian New Car Assessment Program) rating, is a good example of what safety features to look for in a new car.

The IRMRC highlighted equipment like symmetrical all-wheel drive, airbags, electronic throttle control, Vehicle Dynamic Control stability and ABS brakes as impressive features on their research vehicle that add to the overall safety.

Some of these features are relatively new to the market so if you’re thinking about getting a car with extra safety features, make sure they are acknowledged by your insurer to ensure a cheaper premium.

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