Counting the cost of vehicle automation

Auto technology is poised to change dramatically over the next few years. Some of the advances will improve safety and even expedite the auto claims process, but may come with unintended costs.

Onboard computers that run many of a vehicle’s systems can be hacked. An owner’s failure to update the system can affect how some of the semi-autonomous features may operate such as auto parking, lane assist or other notifications. There are unexpected vulnerabilities for vehicles that utilize key fobs to access and start them. A team of researchers in Belgium was able to identify a technique that allowed them to clone the key fobs for the Tesla Model S sedan. To address this issue, some manufacturers are looking at utilizing fingerprint technology. Just like you can use your fingerprint I.D. at the bank or to unlock your cellphone, the same process will be able to start your car in about 2-4 years.

The good news is that technology will also allow an insurer to know exactly what transpired before, during and after an accident. In some cases, it will be able to actually notify the carrier that an accident has occurred, allowing them to dispatch first responders, a tow truck and begin processing the claim while notifying the garage that the vehicle is on its way. (Think OnStar on steroids.)

Another cost of this automation is the expense involved to replace and calibrate replacement parts. Gone are the days of $200 bumpers. With their sensors and cameras, headlamps and bumper covers, replacement parts can run well over $1,000. A car with front-end damage that may have been replaced in the past may now be totaled because of the technology costs involved, increasing replacement costs for carriers.

Technology is also changing drivers’ habits. According to the 2018  Finder’s Safe Driving report, 45% of drivers admitted to talking on their phones while behind the wheel and 70 million drivers (30%)  admit to speeding. Even though they know it’s dangerous, 16% of drivers admit to texting and driving, and only 35% of millennial drivers say they concentrate while driving. Millennials are also four times as likely (28%) to text while driving as baby boomers (7%).

Drivers view texting and emailing while driving as more of a major threat than talking on cellphones. A majority of drivers support legislation that bans reading or sending text messages behind the wheel, but they are less willing to give up the use of their cellphones for talking while driving.

All of these factors create new dangers and issues for drivers and insurers alike. We’ll be addressing some of them at the America’s Claims Executive Conference in Las Vegas on June 24-26. I hope you’ll be able to join us for the discussion.

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