One big reason there’s little relief for auto insurance rates
Recent technology is meant to reduce crashes and the severity of crashes; however, this technology is increasing auto insurance premiums.
Repairing vehicles with newer technology is getting expensive, thousands of dollars more than it used to be. From 2014-2017, airbag sensors have gone up $1,100, LED headlamp assembly has increased $1,800, and front bumper sensors have done up by $950.
Aviva Canada originally reported to Canadian Underwriter that the total cost to repair a vehicle went up 5% from 2017 to 2018. This increase doesn’t include rentals, towing and other costs that go into a claim.
“This is why the number of write-offs continues to escalate because of the amount of money in the bumpers in these systems means that even low-speed accidents can move the car into a total write-off situation,” said Andrew Shepherd, director of industry programs with the Automotive Industries Association of Canada.
“All of the sensors are connected to the computers and the money it takes now to fix those and to recalibrate is climbing rapidly.”
Driver assistance technology can help reduce the number of crashes and help to mitigate future premium increases, noted Phil Gibson, managing director of personal insurance at Aviva Canada in Toronto.
After an accident that damages this technology, the repairs can’t be done by just anyone. A mechanic on newer vehicles tends to act more like an IT technician than the traditional mechanic we’re used to seeing.
“A lot of these vehicles after they’re repaired need to be certified, so there’s the highly skilled labour and the certification process that needs to happen. That again drives up the cost,” Gibson said.
Simple accidents could be costly. A shopping car dents a bumper and leaves a scratch, for example. The car owner may not want to get it fixed at the repair shop, but the car maker would suggest to not only repair the scratch but also do a recalibration. Even the smallest of impacts could off-set a sensor and prevent it from doing its job.
Do-it-yourself fixes are much more complicated now.
“It’s industry-wide – we see the newer cars, the newer technology that is being in them, driving up the cost to repair,” Gibson said. “That does get passed on to the consumer who wants to buy the newest and latest car.”