XC90

Make
Volvo
Segment
SUV

If lofty goals like Volvo's Vision 2020, which aims to eliminate deaths and serious injuries in new Volvo cars by 2020, are an indication of anything, it's that automakers are installing enough safety tech in their cars to reduce the severity of crashes. Less severe crashes, of course, means that the risk of being out on the road goes down. And that should mean car insurance premiums, the monthly payments all drivers are supposed to make to cover the financial portion of that risk, should go down too, right?

Well, not quite, reports Reuters, which is bad news for anyone hoping to recuperate the cost of buying a newer vehicle equipped with the latest ADAS (advanced driver assistance systems) through lower insurance premiums.

As it turns out, there are multiple reasons why insurance companies aren't lowering their rates even though cars are getting safer. Not one of those reasons, however, has to do with the tech not holding up to the promise of reducing the number of crashes that take place. According to Swiss Re AG and mapping company HERE, ADAS could reduce the frequency of accidents by up to 25%.

Unfortunately, insurance companies aren't willing to cut prices to reflect the reduced risk because they claim there is a lack of data backing up automaker's promises of safer cars. "We're not going to go against the data and create any type of false discounts for the purposes of marketing at this point. We just want to make sure the rate is reflective of the risk that it brings," said Steve Armstrong, a vice president of Allstate's pricing department.

To be fair, insurers have a point. For one, it's incredibly hard to quantify many of the metrics that would determine the price cuts, including how many new cars roll off the line with what is many times optional ADAS equipment. Then there's the quality of each suite of ADAS features since this varies by automaker, and whether drivers even use the tech in the first place. Furthermore, ADAS often requires expensive equipment that raises the cost of repairing a car after a crash.

"There's no such thing as a $300 bumper anymore. It's closer to $1,500 in repair costs nowadays," said Richard Lavey, executive vice president at The Hanover Insurance Group. So as exciting as it is to tell your neighbors that your new Tesla is pretty much crash-proof, just remember that your insurance company likely doesn't see things the same way.