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The war on horsepower—and electronics
February 12, 2008
Auto Insurers may be getting ready for a war on horsepower, suggests Joseph B. White in a Wall Street Journal column yesterday. And based on an article in today’s New York Times, the insurance industry might also want to attack automotive electronic entertainment devices.
White in the Journal outlines the trend leading to the possible horsepower war: “The average horsepower for new cars has risen steadily since 1985, both in absolute terms and in terms of horsepower per 100 pounds of vehicle weight. A 1981 Honda Accord had a base engine with just 75 horsepower. A base model 2008 Accord has a 177 horsepower four-cylinder engine, and you can buy a six-cylinder model with 275 horsepower.”
What are drivers doing with this horsepower? White continues, “…motorists are stepping on the gas, especially since the demise of the national 55 mile-per-hour speed limit in 1995. The average vehicle speed exceeded the posted limit on freeways in eight urban areas monitored by the Insurance Institute for Highway Safety.”
Here is what the IIHS has to say: “All of this power on US roads has translated into higher insurance losses. The addition of just 1 horsepower per 100 pounds of vehicle weight resulted in estimated 5 percent higher losses under collision coverage per insured vehicle year…1 percent higher property damage liability losses, 5 percent higher personal injury protection losses, and 4 percent higher losses under bodily injury liability coverage for rated drivers ages 25-64….”
As for electronics, the Times reports, “…auto companies, likening their latest models to living rooms on the road, are turning cars into cocoons of communication systems and high-tech entertainment.” It quotes Chrysler chairman Robert L. Nardelli on this trend: “’I think a vehicle today has to be your most favorite room under your roof,’ Mr. Nardelli said last October at a magazine publishers’ conference. ‘It has to bring you gratification; it has to be tranquil. It’s incidental that it gets you from Point A to Point B, right?’”
That opinion clearly has the insurance industry concerned. The article quotes Anne T. McCartt, senior VP for research at the IIHS as being almost speechless: “’I don’t even know how to respond to that,’ she said. ‘There’s just overwhelming evidence that distraction is a crash risk.’”
So what are the higher insurance losses due to the addition, say, of a dashboard-mounted television? The Times article doesn’t have specific figures for that. But it does cite a study, conducted by the Virginia Tech Transportation Institute and released in 2006, which “found that ‘secondary task distraction’ was a central factor in auto accidents. The biggest culprit was hand-held wireless devices, along with the act of dialing phone numbers or sending text messages.”
What do you think? Would you give up horsepower and gadgets for lower insurance rates?
Posted by Rick Nelson on February 12, 2008 | Comments (8)
