How Self-Driving Vehicles Will Affect Car Insurance

Many motorists are ready for the new updates in the auto and insurance industries. This is not a science fiction book – it’s a reality. The self-driving technology is improving as we speak as a result of machine learning and owner input. Experts expect the self-driving vehicles to be the norm by 2040. Twenty years is nothing. Are you ready?

Major changes are coming to the auto industry, and the insurance industry will consequently see major changes as well. Automakers such as Mercedes-Benz and Volvo already accept liability in case a vehicle with self-driving features is involved in an accident and blamed for it. Tesla is taking it a step further by extending its insurance to buyers of their vehicles. They trust the technology with the up-to-date data that prevents human error, which is the cause of 94% of all accidents.

But much litigation will take place before these things take place and settle down for good. Extensive tracking sensors may be needed as well to figure out whether the Al driver or human was responsible for the accident.

Insurance premiums are expected to drop significantly as well. It may get a little messy at first as drivers and driverless share the road – they will not know what to expect at this point. The good news is that there will be fewer accidents. Currently, approximately 37,000 people in the United States die in a crash annually.  

Advanced driver-assistance systems (ADAS) will be more common and more affordable as older vehicles are replaced.  It’s expected that by 2025 about 40% of vehicles will have systems like forwarding collision prevention and lane change alerts.  Many insurers are already giving premium discounts for these features. With more safety, insurers will need to lower their premiums. Society may end up investing in minimum legal coverage while there are always the full benefits of carrying full coverage.  

Some experts predict that states may alter required coverage guidelines as the roads get safer. When the risk of an accident is low, chances are coverage requirements will be different. Insurance companies will need to reevaluate how technology will impact the industry and make the necessary preparations for future changes.

Of course, the insurance industry will not die but rather pivot with the times. New forms of Al may be more suitable for insurers to tweak data collection. With access to the new information, premiums can be priced with more accuracy and the services offered will be more useful. There is plenty of time to research and make the necessary changes, but make sure you go with the times.

Whether or not you believe self-driving cars will become legal, it’s already happening. A lot of change is coming, and it should not take you by surprise. This is the one road trip insurers and customers will have to navigate on autopilot.