The Relationship Between Car Safety Features and Insurance Premiums

In the last few years, improvements in car safety have evolved to help make car driving an easy and safe experience for all involved. Car manufacturers continue to research and develop safety features that can reduce the chances of accidents, harmful injuries, theft, and other unfortunate incidents. However, did you know that certain car safety features may play a role in reducing your car insurance premium rates too? Read on to learn more.

How Can Car Safety Features Affect Insurance Premium Rates?

The following points illustrate the relationship between car safety features and insurance premiums:*##

1. Insurance companies take many factors into consideration when calculating the premium of a car insurance plan. Many of these factors are centred around risk that is underwritten. The higher the risk that a car is vulnerable to, the higher the premium can be.
2. In simple terms, a higher risk means that the chances of an insurance claim are also high. Lower risks to a car mean that the chances of a claim being raised and the insurance company having to pay compensation are less.
3. Safety features increase the safety and security levels of a car and reduce its risks in various manners. Hence, if a car has multiple safety features, it may be considered less risky than a car that does not have those features.
4. Thus, equipping your car with advanced safety features can lead to a reduction in the premium rates for a car insurance plan.

To get a thorough idea of what the premium for your car (with or without safety features) could be, you can use a car insurance calculator.

Safety Features That May Affect Car Insurance Premiums

Let’s see the type of safety features that can affect car insurance premiums, and how:

Driver Assistance Features

In the last few years, there has been an upsurge in driver assistance features such as the anti-braking system (ABS), Electronic Stability Control (ESB), Lane Departure Warning System (LDWS), and so on. By helping drivers maintain better control over their vehicles, these features prevent accidents that can be caused by sudden braking, skidding or unplanned lane departure.

As the chances of accidents decrease, so do the risks associated with the car. This can result in insurance companies facing fewer claims filed and incurring lower overall expenses. Hence, insurers may offer lower motor insurance premiums for cars equipped with such safety features.*##

Seatbelts and Airbags

Seatbelts are one of the most basic yet essential safety features that can help reduce major injuries to the driver in the car. Similarly, airbags can also play a crucial role in minimising the severity of injuries sustained in accidents. As these features decrease the likelihood of severe injuries, the financial burden on insurance companies is also reduced. This can lead to lower premiums.*##

Theft Prevention Features

To combat the chances of car theft, auto manufacturers include various theft prevention features such as alarms, immobilizers, and GPS tracking systems. These features can reduce the chances of car theft and increase the chances of recovering it in case it is stolen.

Due to these features, a policyholder is less likely to claim compensation from an insurance provider for theft or related damages. Hence, the car insurance premium they may have to pay could be less, too.*##

Important Things to Know

While the effect of safety features is positive when it comes to insurance premium rates, there are some important points you should keep in mind.

1. Not all insurers will reduce their premium rates when considering safety features. Some insurers may have clauses that do not consider the presence or addition of safety features when it comes to calculating premium rates.

2. Some insurance companies may consider only certain safety features when calculating the premium. For instance, anti-theft features may not lead to lower premiums but having multiple airbags in the car might. It is ideal to consult with your insurance provider regarding this before adding any safety features to your car.*##

3. If you have installed any additional safety features to your car during the policy period, then you should inform the insurer when you renew your car insurance plan. Any changes in the premium would follow only after such correspondence.

4. There are many other factors that determine your car insurance premium. It is important to be aware of those factors as well and see how they help reduce premiums when you buy or renew car insurance.*##

Car safety features have come a long way, starting with basic seat belts to sophisticated technologies that we see in cars today. While these safety features can play an important role in reducing car insurance premiums, it is important to be aware of which safety features are included and which aren’t. Additionally, reading through the policy wordings is also advisable. Claims are subject to terms and conditions set forth under motor insurance policy.  

*Standard T&C apply. ##All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply. Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.