More on Self-Driving Cars: Insurance as We Know It May Disappear

As self-driving cars hit the road and the technology becomes familiar chances are that car insurance as we know it may disappear. But between here and there a lot needs to happen. Realistically speaking, most people haven’t experienced autonomous cars before. All of this could complicate things a bit for insurance companies. There will be collisions as usual and a lot of questions such as, who is at fault? and how such situations are investigated? need to be answered first.

Vehicles with fully autonomous capability are not any different from the ones we have on the road now. Automakers understand that the key to acceptance is to understand that too much change too quickly may scare the masses. According to research by the University of Michigan, 96.2 percent of people prefer having a steering wheel, gas and brake pedals available in the self-driving cars.  People prefer a semi-autonomous car that could handle some but not all the driving.

The disruption of self-driven cars to the entire system is happening faster than most people dare to think. The private auto insurance industry is expected to shrink by 60 percent by 2040. Fewer accidents are a good thing for the insurance industry though. Also, people are unlikely to be liable for an accident when a computer is in control. In other words, you will still need insurance, but with less risk involved and you may not be charged the same kind of rates. Don’t assume it will be cheaper.

Some questions need to be asked first. For instance, who is to blame is something goes wrong? A software bug may have created a reason for insurers to prove they don’t have to pay for the accident. On the other hand, if drivers are still responsible even with all the new technology available, are manufacturers going to avoid fault leaving insurance companies to recover the costs through higher premiums?   

Liability could be determined by circumstances. For example, if the accident was caused only by the vehicle, the manufacturer will be liable, but if it was caused by the driver and manufacturer, they will both have to cover the costs. There will be a battle between insurers to determine who will pay for injuries or damages as usual.

In the meantime, you will pay ‘more or less’ the same for insurance. Some experts say premiums may fall as the self-driving technology makes the risks of an accident lower. The manufacturers may become responsible for insurance and you may not need insurance – at least not the kind you are accustomed to.  

People aren’t ready yet to fully embrace self-driving cars since they tend to like things that have been around for a long time. Lawmakers and authorities have expressed their concerns about what could happen when these cars get on the road and mix with the other vehicles. Will it be safe? Change is inevitable. Some experts believe flying cars are next, and airlines aren’t too happy about it.


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