Car insurance companies pay out quite a bit in damages for injuries when the injured are covered by health insurance. Now, with millions more getting coverage through Obamacare and expanded Medicaid, those potential liabilities will likely go down, and then that could have a positive impact on car insurance rates over time. This new dynamic is analyzed in a new study from the Rand Corporation.

This new “Cyclist Detection with Full Auto Brake” from Volvo looks pretty interesting. I’m a little skeptical of the automatic brake feature. Yes, it can save lives, but it will be interesting to see how it works in the real world. As more of these “automated driving” features take hold, it will be interesting to see if car insurance companies will give lower rates if your car has these features.

This story from Cleveland.com highlights an important new trend in the auto insurance business, and it will likely affect you and your own car insurance rates in the future.

When Zshavina Meacher of Cleveland traded in her car for a new 2011 Chevy Malibu last summer, her insurance premium jumped to $510 every six months. Her insurer, Progressive Corp., asked her whether she wanted to cut her rate.

If Meacher agreed to install a device in her car that monitors how safely she drives and the results were good, her rates would go down. If the results weren’t so good, her rates would stay the same. She agreed.

During the first few weeks, the device told Meacher that she slammed on her brakes a lot. She stopped the hard braking.
In February, the 23-year-old’s insurance bill dropped by $120 per six months, or 24 percent.

Meacher is happy her rates went down. And Progressive is happy the risk of Meacher getting into an accident went down. Fewer claims will help keep Mayfield-based Progressive profitable.

The technology that makes this possible is called telematics, and you’re probably going to be hearing more about it as more car insurance companies start using it and more states start permitting it. Along with Progressive, State Farm, Allstate, Nationwide, Travelers and American Family are also trying it, though there are some patent disputes in play as Progressive tries to protect its innovation.

The key is that it works, as information about driving habits is more valuable to insurance companies than demographic information. Also, it’s not surprising that drivers will also be more careful if they know they are being monitored.

But it also raises all sorts of privacy concerns. When does health monitoring start? Do we want insurance companies knowing everything about us?