Does New Tech Effect Insurance Rates?

New car technologies have features in common with other IoT devices of today. The more automated the vehicle, the more reliant the system is on algorithms and AI. When shopping for auto insurance, there are questions that people of today need to be prepared to ask. The more knowledge you have, the better because the old method of the rate calculation for insurance no longer applies to these new variables. 

When shopping for a new car, it’s essential to weigh the latest model’s pros and cons against how much your insurance will increase. This could be something as small as a newer design of bumper or a back-up camera. Examine the levels of insurance being offered, including the premium vs. basic levels. For some people, it’s a waste of money to purchase the higher-end policies. For others, the extra cost is worth it if repairs or maintenance are needed. Opt-in discounts are also carefully worded and must be read carefully, such as with advanced anti-theft services only being considered when merged with a comprehensive premium coverage plan. 

The Repair Cycle 

It is a cyclical process. Over the past several years, car insurance rates have increased as a result of the latest technology. In the past, you could bring a car to an auto body shop or car dealer for a simple issue, such as a cracked bumper. Nowadays, there are built-in sensors and very complex electronic components. A car with a built-in navigation center or a backup camera will require more skilled labor than the past’s standard car repair. Not only will specialized parts need to be ordered, but the labor will also increase as jobs will take longer to complete. The mechanics themselves will be trained and more technical, which will also raise their hourly rates. 

Safety Features

Despite all the exciting new safety features being touted in today’s autonomous cars, there is still much testing left to be done. In addition, humans still have the ability to override a driving system, giving them just as much control as a regular driver. Insurance companies must consider the driver as well as the vehicle, no matter how complex. The learning curve might also hinder, as humans adjust to new distractions of lights and buttons that they are not familiar with. This could slow a person’s reaction time in a crisis. 

 The Driver

Regardless of the technology you have in your car, insurance rates will also depend on you, the driver. Moving violations and accidents on your driving record will increase your rate regardless of the type of car you drive. Demographics also play into how much insurance you will pay. Rural communities have fewer vehicles on the road, which lessens the probability of accidents occurring. This substantially lowers insurance rates.