Vehicle-to-Vehicle Communication and Auto Insurance Premiums

Vehicle-to-Vehicle Communication

Wouldn’t it be amazing to have a vehicle that is on a collision course with your car alert your vehicle of the potential danger before it occurs? Believe it or not, this hypothetical scenario is now a reality thanks to vehicle-to-vehicle communication.

The new technology allows vehicles to communicate with one another, offering great potential for heightened safety on the roads. But could the technology also do a favor to drivers’ wallets by reducing auto insurance costs?

What is Vehicle-to-Vehicle Communication?

Vehicle-to-vehicle communication is the “exchange of data between nearby vehicles,” according to the Research and Innovative Technology Administration (RITA).

Starting in 2002, the U.S. Department of Transportation (USDOT) began developing this technology by conducting research with auto manufacturers to assess the possibilities of producing collision avoidance systems that allow vehicles to communicate with one another. The result was the Vehicle-to Vehicle for Safety program.

The program set out to offer warnings such as the emergency brake light warning, forward collision warning, intersection movement warning and control loss warning to help prevent collisions.

While RITA, a subset of the USDOT, is still conducting research, the program has developed automobile technology that exchanges anonymous, vehicle-based data regarding position, speed and location, allowing cars to do one or more of the following:

  • Sense threats and hazards with a 360-degree awareness of the position of other vehicles and the threat they present
  • Calculate risk
  • Issue driver advisories or warnings
  • Take pre-emptive actions to avoid and mitigate crashes

A number of automakers have been working on V2V technology for their vehicles for years, including General Motors, Honda, Hyundai-Kia, Mercedes-Benz, Nissan, Toyota and Volkswagen. Ford in particular made news recently after releasing a new Taurus model that utilizes red lights that pulse on the lower windshield to warn that other cars are approaching.

The government plans to use it and about 3,000 other cars, trucks and buses driven by volunteer drivers in Ann Arbor, MI over the next year to test the systems in hopes of determining whether this automobile technology can indeed make a difference on the roads.

Could Vehicle Safety Technology Reduce Auto Insurance Premiums?

Vehicle-to-vehicle communication offers a lot of exciting possibilities for drivers, and can significantly reduce the number of fatal collisions occurring each year. But is it possible that it could also make a difference in auto insurance costs?

Well, let’s take a look at the factors that help contribute to auto insurance costs. Several are related to driver risk, including age, history and even the neighborhood of residence. Of course, driving history is crucial in determining a person’s history with accidents, something that could possibly improve through heightened awareness with V2V technology.

But a couple of vehicle-related factors — vehicle type and vehicle safety ratings — could encourage companies to reward drivers who purchase cars that are, in theory, guaranteed to improve safety on the road.

Of course, it’s important to consider that vehicles equipped with advanced technology will likely come with a higher price tag, resulting in a higher insurance rate by default.

Also, the Insurance Institute for Highway Safety (IIHS) noted in 2011 that the various forms of collision avoidance technology packaged on earlier vehicle models, including advanced braking systems, had not yet been fully successful in preventing crashes, largely because individuals who drive the vehicles don’t always know how to use the technology responsibly.

In fact, some decided to drive more recklessly than usual, assuming the technology will do the work for them, while a study released in 2012 by IIHS found that drivers of more recent V2X technology, which allows vehicles to communicate with roadside infrastructure, has sounded so many alerts to drivers in transit that they’ve turned off their alerts completely, immediately eliminating its safety benefits.

Due to these potential setbacks, experts have recommended not giving up collision insurance under the assumption that the technology will prevent crashes. It’s likely that insurers will adopt a similar philosophy for some time, not opting to automatically jump to the conclusion that vehicle safety technology will immediately improve safety conditions on the road.

So while this automobile technology could possibly result in lower insurance rates at some point, it’s safe to assume it won’t guarantee reduced premiums in the near future.

Image: U.S. Department of Transportation