Will New Car Technology Make A Difference On Auto Insurance Rates?
At kanetix, our interest is in insurance, so we keep our eyes open for any new developments that may affect the auto insurance industry. Recently, rumors of a breakthrough by a little known company called EEStor caught our attention because of the far reaching implications of the technology they may have developed.
Every so often, a technology comes along that promises to revolutionize the world. More often than not, these claims eventually fizzle, and we’re left disappointed and more skeptical of the next claim that comes around. Sometimes, new technology appears and at first, it’s seen as quaint and amusing, and dismissed by the prognosticators of the day, only to go on to revolutionize the way we do things and make fortunes for those with the foresight to jump on board early.
This was true of many technologies in their infancy. Take the automobile for instance. When it first began making an appearance in the late 19th century, many folks clung to the belief that it could never truly replace the trusty, reliable horse. Same thing with aircraft - too flakey and dangerous to be of any real use. More recently, the personal computer made its first appearance in the late seventies, and even some of the most technologically astute among us, failed to grasp the full implications of its arrival, until there was a machine popping up on every second desktop.
Recently, rumblings of an astonishing breakthrough in “electrical energy storage technology” from a practically unheard of company called EEStor, out of Cedar Park, Texas, have some claiming that we are on the verge of a complete revolution in electric powered vehicles.
With EEStor, you can forget about Hybrids, ethanol or hydrogen powered
vehicles and even fuel cell technology.
If the rumors are true then EEStor have developed the next “really big thing”.
Imagine an “electrical energy storage device” that can charge up in minutes, power a vehicle for hundreds and hundreds of miles on less than ten dollars worth of electricity (at today’s prices) and allow for performance characteristics that rival those of today’s super cars. Not only that, but the device is claimed to weigh one-tenth the weight of conventional lead-acid batteries, with practically unlimited re-charging cycles and be only slightly more expensive than today’s mid range conventional gasoline power sources. Sounds too good to be true – right?
Unfortunately, EEStor is being pretty secretive about the whole thing, and who can blame them. If the rumors are true, EEStor could be in possession of technology that will literally change our world, and they will no doubt be a household name in fairly short order.
As we said earlier, at kanetix, our interest is in insurance, and we wondered how such a revolution in automotive technology (if true) might affect the auto insurance rates of those who drive such a vehicle. Well, EEStor is unlikely to be thinking about such things, but we sure are.
Now, it wouldn’t be the first time that so called “revolutionary technology” failed to materialize as envisioned, but it does seem that we’re overdue for some kind of technological breakthrough in battery or “electric energy storage” technology, with not a huge amount of progress over the last hundred years or so. So, out of interest, kanetix took a look at some data that we were able to gather through our sister site: http://www.kanetix.ca, regarding the insurance rates in Canada for some of today’s advanced hybrid vehicles. We wanted to see if we could discern a trend in auto insurance rates for cars of this nature.
While hybrid vehicles have only been around since around 2000, we were able to compare insurance quotes for the Toyota Prius Hybrid, Ford Escape Hybrid, Toyota Highlander Hybrid and Honda Civic Hybrid. What we found was not especially encouraging, nor especially discouraging, with a bright spot along the way.
If you remove a driver’s “personal insurance and driving experience,” there was basically no real difference in premiums quoted. But, it does seem that some auto insurance providers are trying to encourage the trend to “greener” auto technology, with small discounts of around 10% for such cleaner fuel vehicles.
What our survey basically tells us is that regardless of technology, car insurance will always be based on the same basic things, namely, how often they are stolen, how much they cost to repair after an accident, their propensity to be in an accident and the frequency and severity of injuries if in an accident. And, of course, an individual driver’s "personal insurance and driving experience."
EEStor may indeed have found the holy grail of “electrical energy storage technology”, but unless auto makers are able to incorporate this new power source into safer, more crash resistant and cheaper-to-repair vehicles, we are unlikely to see insurance rates for electrically powered vehicles decline significantly over regular gasoline powered cars.
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