Car feature could put the brakes on premiums

The auto industry’s move to standardize a once-pricey option is poised to cut accidents but also premiums, say brokers

Motor & Fleet

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There have been numerous instances of safety features, which were introduced in expensive, luxury cars, slowly becoming a part of every modern car. Features like airbags, ABS, Electronic Stability Control, etc. have all followed this trajectory.

The latest paradigm-shifting safety feature to become standard will be Automatic Emergency Braking (AEB). It is the advanced form of Forward Collision Warnings and uses sensors like radars, lasers or cameras to detect a crash, and in case the driver doesn’t take appropriate action, applies the brakes. Depending on speed, the application of the brakes may not be enough to prevent an accident. But, it will definitely help lower its severity.

According to the Insurance Institute for highway Safety (IIHS), more than half of the vehicles sold in North America come with collision warning systems with AEB present in over a quarter. However, they are not standard.

But, the situation is about to change. Ten major automobile manufacturers – Ford, GM, Audi, Mercedes-Benz, BMW, Toyota, Volkswagen, Mazda, Volvo and Tesla – have entered into an agreement with the United States Department of Transport, the IIHS and the National Highway Traffic Safety Administration (NHTSA) to make AEB standard in all vehicles sold in the US (and by extension, Canada). These companies will work with the IIHS and NHTSA to work out the finer points and create a timeline.

This strategy creates a win-win situation for everyone involved. Regulators get to avoid the difficult task of rulemaking, while automakers get to have their say in the important aspects of the technology’s implementation.

However, don’t expect every car in North America to have AEB just yet since these ten manufacturers only account for around half of all new-vehicle sales. But, competitive pressure is expected to make other manufacturers follow suit.

“These 10 manufacturers have committed to an important principle: AEB is a life-saving technology that should be available to every vehicle owner,” said Mark Rosekind, NHTSA Administrator. “In the months ahead, NHTSA will work closely with IIHS and the auto industry to carry out that commitment, and we encourage every other manufacturer to join this effort.”

According to a recent report by the IIHS, AEB can reduce insurance claims by almost 35 percent.

Adrian Lund, IIHS President, said that there is overwhelming evidence to support the effectiveness of AEB.

“Most crashes involve driver error. This technology can compensate for the mistakes every driver makes because the systems are always on alert, monitoring the road ahead and never getting tired or distracted,” he said.

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