Ways insurance agents can prepare for the future of smart highways

As vehicles, roadways and infrastructure become increasingly connected, our driving experiences and associated risks are rapidly changing. Smart highways, which integrate sensors, data-sharing tools and AI-fed traffic systems, are already actively reshaping how people get from point A to point B.  

This evolution brings new opportunities. Understanding how these technologies work — and influence driving behaviors — can help you better advise your clients for what’s ahead. Let’s break down what smart highways are, the tech behind them and explore how these innovations could impact coverage limits, pricing and policyholder expectations.  

What is a smart highway?

A smart highway, also known as a smart road, is a modern roadway enhanced with integrated technologies that optimize traffic flow, improve accident response, enhance safety and support vehicle connectivity. These roads use sensors, cameras, artificial intelligence (AI) and wireless communications to collect real-time data on speed, weather, road conditions and human-driven and autonomous vehicle behavior.  

Smart roads types

While the term “smart highway” refers broadly to technology-enhanced roadways, specific features can vary depending on the infrastructure’s purpose. Some are designed to improve traffic flow or safety, while others focus on sustainability or supporting connected vehicles.  

Here are four common types of smart road technology in use today:

• Smart lights
  Sensors and AI adjust signal timing to help reduce congestion, cut down on idling and keep vehicles moving more efficiently. New Jersey’s Meadowlands region operates an adaptive signal control network across more than 128 traffic lights. These signals adjust in real time to traffic flow, reducing travel times, improving speeds, and reducing crash rates across a 40 square mile area.

• Priority smart lane
  Special-use situations are activated or adjusted based on real-time traffic needs, such as emergency services, connected or autonomous vehicles and high-occupancy cars. In Northern Virginia, the I‑66 express toll lanes use dynamic electronic tolling to maintain reliable travel times and encourage carpooling. Drivers see variable pricing based on demand, and excess toll revenue is reinvested in transit projects.¹

• Use of WiFi
  Wi-Fi and wireless communication technology enable vehicles to share information with the road and with each other, supporting collision warnings and optimized routing. In Michigan, a three-mile stretch of I-94 is being piloted as a smart corridor equipped with sensors, cameras, wireless radios, and edge computing infrastructure. These devices work together to monitor traffic flow, detect incidents, and collect real-time environmental data such as weather conditions. This approach reflects the broader trend of combining technology with traditional infrastructure into intelligent systems that can adapt, learn, and improve over time.²

• Solar-powered roadways
  Solar panels power streetlights, data sensors or even EV charging stations. 

Present and future of smart highway technology

For insurers and agents, smart roads mean adapting to a world in which vehicles and infrastructure generate data that could influence pricing, claims and coverage recommendations. As these systems expand and become more common, your clients will experience a range of benefits that also intersect with the value of their insurance coverage, including:  

Benefits of smart roads

• Improved traffic flow: Smart traffic management systems claim to reduce stop-and-go traffic up to 30% by optimizing signal timings based on data.³ 

• Fewer accidents and safer roads: Advanced monitoring systems and vehicle-to-infrastructure (V2I) communication are intended to enable quicker accident detection and more efficient emergency responses. With over 40,000 fatalities⁴ on American roadways each year and today’s drivers overwhelming agreeing driving has become more dangerous, this technology has the potential make a significant impact. 

• Environmental sustainability: Smart roads hope to reduce congestion, idling times and contribute to lower vehicle emissions. Additionally, the integration of renewable energy sources, such as solar-powered roadways, supports eco-friendly transportation infrastructure. 

• Support for autonomous vehicles and EVs: In 2023, 1.2 million EVs⁵ were put into service in the U.S., and while progress varies by state, infrastructure is gradually adapting to support this shift with innovations like in-road charging and EV-friendly roadway design.⁶ At the same time, integrating sensors and real-time communication systems enables autonomous vehicles to navigate more safely and efficiently. 

• Data-driven urban planning: The data collected from smart road systems assists city planners in making informed decisions regarding infrastructure development, traffic management and public transportation enhancements. 

Impacts of smart highways on policyholders and insurance companies

Future smart highways could generate real-time, actionable data, reshaping how insurers assess risk, process claims and personalize policies. This creates a new level of transparency and responsiveness, while also opening the door to more dynamic coverage options and customer expectations. At the same time, these technologies are expected to influence driving habits by promoting safer behavior through real-time alerts, adaptive speed limits, and both vehicle communication that may help prevent accidents before they occur. 

This shift will unfold in five key areas:  

1. Behavior-based pricing: Smart infrastructure and telematics tools can capture individual driving habits like speed, braking patterns and route consistency. With this data, insurers may be able to move away from static factors like ZIP code or vehicle type and toward more accurate, usage-based pricing. 
2. Faster, smarter claims processing: If road sensors, vehicle data, and video capture work together, claims can be validated more quickly and with greater accuracy. This reduces the policyholder’s burden and helps resolve claims more efficiently. 
3. Proactive risk prevention: With predictive analytics powered by roadway data, insurers could identify risky driving zones, frequent accident areas or weather-related hazards — and alert policyholders before something goes wrong. This would support a more preventive approach to risk, rather than reactive. 
4. Reduced claims frequency: As smart roads improve traffic flow, reduce collisions and eliminate some infrastructure-related hazards, the frequency of certain claims —like fender benders or intersection accidents — may go down. 
5. More personalized coverage: With more insights at your fingertips, you can have richer conversations with clients, offering tailored advice based on where and how they drive, and positioning yourself as a trusted advisor in an increasingly tech-driven landscape. 

Present and future of smart highway technology As mentioned above, we’re already seeing the impact of smart highway technology in everyday life. Electronic tolling systems like TxTag in Texas and I-PASS in Illinois allow drivers to move through toll points without stopping, driven by sensors, radio frequency identification (RFID) tags and AI-powered license plate recognition. GPS-enabled apps like Google Maps and Waze use real-time traffic and road condition data to offer faster routes and alert drivers to construction, congestion and hazards.  

Over the coming decade, smart highways are set to become deeply integrated systems combining real-time connectivity, responsive infrastructure, and predictive artificial intelligence. Industry analysts forecast that universal vehicle connectivity, where nearly every new vehicle includes V2X (Vehicle-to-Everything)⁷ radios, could be standard by the early 2030s. This could enable seamless interaction between vehicles of all types, urban development, and roadside infrastructure. Together, these systems will allow roads to respond in ways that improve safety, sustainability, and traffic efficiency.  

The following milestones offer a glimpse into how this ecosystem may evolve:  

• 2027: Regional smart corridor projects expand in urban and suburban zones, integrating roadside sensors, edge computing units, and connected traffic signals. Cities begin to use predictive analytics for traffic optimization based on real-time and historical data. 

• 2030: Major interstate highways feature integrated V2X systems. Vehicle-to-infrastructure communication becomes standard in mid-range electric vehicles. Urban areas adopt dynamic tolling and real-time rerouting for freight and commuters along with notifying drivers of road hazards using computer vision. 

• 2033: Over 50% of drivers use electric vehicles, enabling highways to support smart charging lanes and energy-responsive routing. AI-driven traffic control adapts routes based on vehicle type, road wear, and upcoming weather conditions. 

• 2040: Nearly all new vehicles are equipped with Level 4 autonomous capabilities. Smart cities coordinate with highways to predict and redirect traffic for large events, disasters, or major maintenance. Climate-resilient infrastructure integrates weather mitigation strategies into traffic planning, such as preemptive rerouting during storm forecasts or icy conditions. 

While the pace of progress will vary by region, the direction is clear: highways are becoming smarter and more connected. 

Challenges of smart highway development

While the future of smart highways is full of promise, it’s important to recognize that progress won’t happen at once. Retrofitting aging infrastructure with modern technology can be complex and costly, especially in rural or underfunded areas.  

Financial investment remains a key barrier, and the pace of adoption will likely vary by state or region. Even where progress is underway, challenges like ongoing system maintenance, cybersecurity vulnerabilities and long-term sustainability will need to be addressed.  

Help your clients learn more about telematics

As smart highways and connected infrastructure become more common, telematics will play a bigger role in how clients understand and manage their driving behavior. These technologies could work together — smart roads generate the data, and telematics turns that data into meaningful insights for both insurers and drivers. Tools like Nationwide’s telematics solutions offer a clear path to safer driving habits, personalized pricing, and more proactive risk management. Our driving research found that 70% of all consumers⁸ would consider joining a rewards-based driving program. 

• SmartMiles is pay-per-mile insurance for low-mileage drivers that offers a flexible rate based on miles driven.⁹ 

• SmartRide rewards safe driving with a discount of up to 40%.¹⁰