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What is a V2V communication system?

v2v communication system Vehicle-to-vehicle (V2V) technology, which is currently being developed by automakers worldwide, has the potential to greatly reduce traffic accidents by enabling cars to communicate with each other to avoid collisions.

V2V enables cars to communicate over wireless networks, exchanging information about auto locations, directions of travel and speed. Using this data, V2V systems calculate when a crash is likely to occur and warn drivers to apply their brakes.

The U.S. Department of Transportation estimates that V2V systems could reduce crashes that don't involve driver impairment by drugs or alcohol by as much as 80 percent, with the potential of preventing up to 20,000 U.S. deaths each year.

There is excitement in the insurance industry because V2V has the potential to increase driver safety and reduce accident claims, says Carole Walker, executive director of the Rocky Mountain Insurance Information Association.

After car insurance companies gather enough data about how well V2V systems prevent collisions, carriers may be able reduce auto insurance premiums. 

Automakers are likely to pass some of the costs of adding V2V systems to their cars to consumers, says Russ Rader, a spokesman for the Insurance Institute for Highway Safety.

However, he adds, "But there are also substantial benefits that accrue to society because of fewer injuries and deaths from motor vehicle crashes."

When will V2V be available?

For V2V to work effectively, all auto manufacturers must take part, as all vehicles must be able to connect with each other.

So far, the leader in the drive to bring V2V technology to U.S. highways is General Motors.

In late 2014, the company announced that a V2V system would be included in its 2017 Cadillac CTS, making it the first commercially available vehicle with V2V technology.

In February 2014, the Wired technology news website reported that nearly every automaker is developing some form of V2V.

For example, German automakers have launched a pilot program that combines V2V with vehicle-to-infrastructure technology, allowing cars to communicate with traffic lights as well as with V2V-equipped autos.

Hyundai, Ford, Honda, General Motors, Mercedes-Benz, Toyota, Nissan and Volkswagen have been developing V2V technology through a group called the Crash Avoidance Metrics Partnership (CAMP). Other car manufacturers are developing V2V tech independently.

In February 2014, the Reuters news service reported that federal officials are crafting a regulation to require all new cars to have V2V technology. This law is expected to take effect by early 2017.

Will V2V communications reduce car insurance costs?

In order for V2V to have a major impact, it must be widely used by U.S. drivers.

A February 2014 Associated Press report said safety benefits may be seen with as few as 7 to 10 percent of vehicles equipped with V2V.

Once all automakers start adding the technology, it could take 15 years or more for half the cars in the U.S. to have the equipment.

Insurers typically pass along any savings they realize to consumers. When insurers determine there is a decrease in accident frequency and severity among V2V-equipped cars, "it will be reflected in rates," says Kevin Foley, a New Jersey insurance agent.

Russ Rader, spokesman for the nonprofit Insurance Institute for Highway Safety, says he's uncertain how long it will take for V2V to result in lower insurance rates for drivers. 

"V2V communications has a lot of potential, but it will be a long time before that potential can be realized," Rader says. "The timeline for safety benefits is long. You have to have a lot of vehicles broadcasting their position, speed and direction."

Loretta Worters, a spokeswoman for the nonprofit Insurance Information Institute, says it likely will take several years of widespread use of V2V systems before insurance companies gather enough information about reduced claims costs to lower car insurance premiums.

While V2V may end up reducing insurance company costs, carriers will need to look back over the time to see if there is a direct correlation between the use of such systems and fewer claims, she adds.

Is there a downside to V2V technology?

As technology makes cars more capable of collecting data -- such as how fast you drive and where you travel – many consumers worry about a loss of personal privacy.

In October 2014, The Detroit News reported major carmakers are working to reassure the public that their privacy won't be threatened by V2V systems. The Alliance of Automobile Manufacturers, a trade group that represents many U.S. automakers, and the Global Automakers, a group for foreign auto companies, say they are committed to ensuring data privacy, the newspaper reported.

Department of Transportation officials say V2V technology won't compromise personal privacy because the data-gathering process doesn't involve recording or exchanging personal information.

Another possible drawback to V2V is the added cost to consumers. In February 2014, ABC News reported that V2V could increase the cost of individual cars by $100 to $200. 

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