Cheap car insurance is possible because modern vehicles are safer

Back in the 1970s, the Ford Pinto had an unfortunate characteristic. If there was a rear-end collision, it often burst into flames. Ignoring the advice of its engineers, the manufacturer decided not to worry about safety. It made a car that looked good and was easy to market. Marketing became a problem when news about the fire hazard could no longer be suppressed. Today, people studying business ethics use this as a case study on how not to run a business. Partly as a result of this public relations disaster, the government decided it should become more active in encouraging manufacturers to become more safety conscious.

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The National Highway Traffic Safety Administration had been formed in 1970. It was expanded to run tests on all new makes and models. Today, it runs a full set of crash and rollover tests and, more importantly, actively discusses design with the manufacturers. When faults are discovered, recalls are arranged and agreed fixes put in place. The vehicles we drive today are the safest we have ever had.


One of the key results has been the fall in the number of people seriously injured. This is quite remarkable given that the number of traffic accidents each year has remained fairly stable. This is not only good news for the drivers and their passengers, it's also good for the insurance industry. You may have noticed the steady rise in the cost of medical treatment over the last decade. It's become increasingly expensive for both immediate treatment and long-term rehabilitation following injury. With fewer people needing treatment, the cost to the insurers has fallen. This has been passed on to us through relatively cheap car insurance rates.

So what specific safety features have improved our chances of survival. It all begins with the humble seat belt. It may not sound a revolutionary device, but persuading people to wear the belt has been the single most important development in preventing head injuries as people not longer try viewing the world through the windshield. Now add in air bags and the safety cage. Suddenly the compartment for holding people became safer. Outside, engineering metal has produced crumple zones that absorb the energy of impacts. It's cheaper to replace the body parts than to repair the human body. Anti-lock braking systems helps prevent skidding by keeping more of the tire on the road.

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The same applies to traction control which keeps rubber on the road while accelerating. Finally distractions are reduced by paddle controls for changing gear, centralizing switches for cruise control, the windows, and adjustments to the seats for comfort. Put all these together and you have a safer vehicle and fewer accidents. Fewer accidents mean less money required to pay out on claims so cheap car insurance rates can apply to more drivers. All this stems from the disasters of the 1970s and 1980s. Big government's intervention has saved tens of thousands of lives and helped produce cheap car insurance for more drivers.