Without rewards and consequences, a few things in life may seem pointless. For instance, following road safety rules may seem pointless if there are no consequences or rewards associated with it.
Without consequences, more impatient drivers may run stop signs or speed on highways. Similarly, people who attend driving schools can be rewarded with a defensive driving class discount from their insurance provider. Without the discount, fewer unskilled drivers may attend driving school.
Insurance companies help enforce road safety by including specific rewards and consequences in their policies like discounts and rate increases.
Cities reward commuters to encourage safe transportation. However, it’s easier to avoid the consequences of unsafe driving and be rewarded for safe driving when you know how insurance companies help make the roads safe.
Risk-Based Insurance’s Role in Road Safety
The way that car insurance companies determine the rate you’ll pay for your insurance coverage helps to promote personal responsibility.
They use a risk-based scale that takes into account several factors. While many of those factors aren’t tied to how you drive, such as age, gender, marital status, credit score, and address, there is one main factor tied to personal responsibility.
Car insurance underwriters look at your driving record, which they consider the most important factor. The cleaner your driving record, the more responsible and lower risk you seem to the insurer. They will reward you with a lower rate and let you take advantage of their discounts related to being a good driver.
On the other hand, if your driving record shows you’re prone to accidents and tickets from driving irresponsibly such as reckless or distracted driving, an underwriter will place you at a higher risk and you’ll bear a higher cost for your car insurance.
Based on the consequences associated with being a high-risk driver, paying for those consequences — such as your insurance rate spiking after a car crash — can help motivate a driver to adopt safer driving habits over time.
Insurance protects the health and property of auto accident victims and helps them extend their market, since consumers are required to buy insurance policies in most states.
Reducing the severity and instances of collisions also benefits the well-being of the general public while lowering the number of insurance claims the insurance industry has to handle.
A motorist who wants to keep a clean driving record is less likely to get into an accident than a driver who isn’t concerned about safety or keeping their record clean.
Nevertheless, since increased insurance rates can disrupt financial security, the driver who isn’t concerned about driving safely may keep a clean driving record for financial reasons.
Safe Driving Technology Is More Common
Insurance companies give discounts to drivers who have vehicles with safety features installed to encourage them to choose safer vehicles. If there is a collision, safety measures can protect the driver and passengers, and certain driving technology can even prevent accidents from occurring.
Airbags, seat belts, and daytime running lights are features that have been around a bit longer compared to the more technologically advanced features like lane departure systems and electronic stability control.
Vehicles with a lane departure warning system can help drivers who are tired or distracted while driving. Depending on the insurance provider and the type of system placed in the vehicle, drivers with this feature can get a discount on their insurance policy.
Similarly, some insurance companies provide discounts to clients who have automobiles with electronic stability control (ESC). On slippery or rainy roads, ESC helps drivers keep control of their cars.
Insurers may also provide discounts to drivers who have advanced anti-theft equipment in their vehicles, such as ignition kill switches. These anti-theft devices protect cars while they are parked, helping to reduce the number of stolen vehicles. Anti-theft devices can actually help road safety, as the priority of someone stealing your vehicle certainly isn’t worrying about driving safety.
The number of discounts offered to clients who have more safe driving technology in their car helps them save money and encourages them to follow road safety rules.
The Insurance Industry and the Legal Industry
In most states, driving an automobile without insurance is illegal and in every state except New Hampshire, it will result in a ticket.
Driving uninsured means that drivers are ticketed, fined, given marks on their driving record or lose their license. Once they try to get insurance, they are given higher insurance policy rates.
As a result, most drivers try to maintain insurance, take advantage of discount offers, and practice safe driving. This creates a cycle that benefits the insurance industry and local government’s efforts to protect the general public.
Insurance Increases Public Awareness of Road Safety
The insurance industry promotes road safety by providing discounts to those who avoid unsafe driving practices such as speeding, drinking and driving, and not using seatbelts.
With insurance coverage being a requirement in most U.S. states, many drivers know basic information about the auto insurance industry like driving safely to pay a lower monthly premium.
Driving Practices Data Is Shared With Road Safety Experts
To prove they are practicing safe driving so they can get lower premiums, consumers sign up for safe driving discount programs. These programs use auto telematics, which is a type of vehicle monitoring technology.
Telematics technology collects and transmits driving data such as location, speed, distance traveled, time of usage, and onboard diagnostics.
One of the most prominent vehicle telematics systems, for example, is OnStar. These systems may be used to track down stolen automobiles or to track down criminals.
The data collected by these telematics systems can contribute to a better understanding of the causes of road crashes and safe driving behavior. In some cases, insurers can share that information with road safety experts who conduct life-saving research.
By providing this data on road user behavior, collisions, injuries, and vehicle safety issues, insurers can play a major role in promoting road safety. Insurers sharing their knowledge of best driving practices also help to minimize the number and severity of automobile collisions.
Imani Francies writes and researches for the insurance comparison site, TheTruthAboutInsurance.com. She enjoys helping people find the best car insurance policy and rates that meet their specific needs.