High Cost of High Tech | Shelter Insurance®

“Why Was My New Car Totaled?” The High Cost of High Tech


Many of today’s newer vehicles are packed with safety features like sensors in the bumpers and even in the windshield, and according to the Insurance Institute for Highway Safety (IIHS), they are reducing accidents:

  • Automatic Emergency Braking – 50% fewer front-to-rear crashes and 56% fewer front-to-rear crashes with injuries
  • Automatic Emergency Braking with Pedestrian Detection – 27% fewer pedestrian crashes and 30% pedestrian injury crashes
  • Lane Departure Warning – 11% fewer single vehicle, sideswipe and head-on crashes; 21% fewer injury crashes of the same types
  • Blind Spot Detection – 14% fewer lane change crashes, 23% fewer lane change crashes with injuries.
  • Rear Automatic Braking – 78% fewer backing crashes (when combined with rearview cameras and parking sensors)
  • Rearview Cameras – 17% fewer backing crashes
  • Rear Cross-Traffic Alert – 22% fewer backing crashes

Having all these features seems to be worthwhile, until a seemingly minor accident totals your car. Yes, it can happen. In the insurance industry, a car that has been in an accident is considered totaled if repair costs reach a certain percentage of the value of your car. (That percentage varies by state.) All those high-tech safety features can make the cost to replace a bumper, fender, side mirror or windshield increase significantly. Sensors are placed in all these areas of a car, which happen to be the areas that are most vulnerable to damage.

IIHS ran demonstration tests to illustrate how parking mishaps can add up to pricey repairs. The tests conducted were four low-speed tests with and without rear autobrake, and the damage was estimated the way a claims adjuster would. Vehicles tested were a 2017 Cadillac XT5 backing into a pole and a 2017 Outback backing into a 2016 Chevrolet Cruze. The vehicles with rear autobrake didn’t hit anything, so there was no damage. The vehicles without autobrake did hit and had damage.

  • The XT5 sustained damage to the bumper cover, tailgate, hitch bar, energy absorber, rear body panel, trim and assorted brackets. It needed an estimated $3,477 in repairs.
  • When the Outback and Cruze’s rear bumpers collided, the amount of damage for both cars came to $1,899-$1,159 for the Outback and $740 for the Cruze.

Those were the costs for low speed accidents. The cost would be much greater at higher speeds. Even something like hitting a deer at 20 MPH can result in high cost damages, so imagine what a 30 MPH fender bender could cost. And if the airbags are deployed, the costs soar even higher.

More than Just Repair Costs
It’s not just the cost of the sensors that are driving repair costs up, but the labor involved in recalibrating the sensors so they work properly when they are replaced. If these repairs are not done correctly, they may not work the way they should, or they may not work at all. That can be very dangerous for drivers who have become accustomed to—and perhaps even come to rely on—these safety features. Not all body shops are qualified to fix new tech, which can result in errors.   

Age Matters
Another factor that contributes to whether or not your car is totaled is the age of the car. It’s no secret that a brand new car loses value when you drive it off the lot. In fact, according to Carfax it can. While nobody wants to think about owing more on their car than what it’s worth, GAP coverage could help safeguard against the difference. Your agent would be glad to explain more about GAP coverage. If you have a personal auto policy with Shelter, new car replacement coverage is included with your policy. This means if you bought a brand new car (not used) within the last 12 months and it has less than 15,000 miles on it, Shelter will pay you an additional amount—above the comparable value—for the same year, make and model.

How This Affects Rates
The cost of fixing cars after an accident is likely higher than ever, so it stands to reason that the cost of claims goes up too.

High tech safety features are beneficial, but like all good things, they come with a price. The good news is the introduction of technology in our vehicles should greatly decrease accident statistics. We’re not there yet, but as more and more car manufacturers make these features standard, it could eventually happen.

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