Safety
The Insurance Institute of Highway Safety (IIHS)[9] is a nonprofit organization, which receives funding from auto insurers, with the intent to reduce the number of accidents, extent of damage, and rate of personal injury. Recognizing that the state-imposed regulations of the National Highway Traffic Safety Administration (NHTSA) did not adequately reflect customers' and insurers' goals, IIHS formulated several unique safety tests.
In addition to the NHTSA mandated frontal-impact test, the frontal-offset-impact test was developed by IIHS to better represent real-life impacts. Most frontal impacts are offset, meaning the impact is borne by only a portion of the front of the automobile, and not evenly distributed over the entire front. The IIHS side-impact test also differs from NHTSA version, to simulate the more dangerous and increasingly common occurrence of a taller, sport-utility vehicle impacting the side of an automobile. In 2009, IIHS began roof crush testing sport-utility vehicles, which are prone to rollover accidents, to a stricter standard than NHTSA mandates.[10]
IIHS purchases and tests new and redesigned models, with the detailed results published to the automakers and insurers, and summary reports released to the general public.[11] The net benefit to consumers is safer vehicles and lower insurance premiums, which stem from the insurers' benefit of less and lower payouts. Auto manufacturers also benefit from testing that better represents real-life conditions and thus reduces the risk of litigation.
These desires would remain in a true free market, and therefore an IIHS or competitor adding similar value would maintain its important role. Safety features with questionable value, such as airbags, would receive the close scrutiny they deserve in a true free market, and consumers would benefit from the transparency and frankness that our current system lacks.