What do Tesla, Ford and General Motors have in common with German automakers Audi, BMW and Mercedes-Benz?
Besides the fact that they all manufacture automobiles, all of these companies are united in their desire to take you out of control of your car's brakes.
A commitment by 10 major car companies, which also includes Japan's Toyota, Mazda and Chinese/Swedish car maker Volvo, is set to make automatic emergency braking (AEB) the new standard for all new vehicles built by these companies for the US market.
The announcement was made earlier this month at the opening dedication ceremony of a newly expanded Vehicle Research Center operated by the Insurance Institute for Highway Safety (IIHS).
Just last week the U.S. Department of Transportation said that it will be investing up to $42 million in pilot projects aimed at testing next generation connected vehicle technologies in New York City, Tampa and Wyoming. The goal of these pilots is to cut the unimpaired vehicle crash rate by 80 percent by enabling vehicles to instantly communicate with their surroundings and with each other, which will also help minimize congestion and reduce greenhouse gas emissions.
But will all of these automated safety features bring about any real reduction in your insurance premiums?
According to an analysis undertaken by Swiss Re, we can expect to see significant changes in the auto insurance industry in the coming decade.
The reinsurance giant's analysis projects four possible scenarios affecting both insurance companies and their customers, ranging from the shifting of insurance coverage from driver-based risk to mechanical/electronic fault-based risk, to risk slicing in the event that cars with both driver controlled and self-controlled options become popular, to the complete elimination of risk if fully-safe autonomous vehicles become standard. In the last case the companies advise insurers to transition into in-car infotainment service companies, among other options.
While equipping your car with safety technology will already score you a discount on many auto-insurance policies, it will be more difficult for insurers and the government to justify the need for auto insurance as technology continues to remove the elements of risk.
But history shows that driving safety improvements and auto insurance savings do not necessarily go hand in hand.
Although the implementation of technologies ranging from electronic parking assistants to automatic braking and cruise control has taken enormous strides in recent years, we saw projected average auto insurance spending rise 2.6 percent in 2013 (to $836) and 2.9 percent in 2014 to $860. (according to an Insurance Information Institute report).
In May this year, the Insurance Journal reported a hike in 2015 rates by major auto-insurance providers GEICO and Allstate.
It's fair to say that while automatic brakes and similar gimmicks may protect you from an accident, they won't likely protect your wallet from rising insurance premiums in the immediate future.