Insuring the Future of Self-Driving Cars

By June 11, 2018 December 13th, 2018 Premier Insurance

While self-driving cars may sound like they belong in a futuristic movie, they are slowly becoming a reality across the country. According to a study done by Accenture with the Stevens Institute of Technology, there are estimates that by 2035, more than 23 million driverless vehicles will be on the road. While there are many risks that are specific to driverless vehicles, there are also changes that will impact the insurance world and the consumers that are interested in this technology.

What do self-driving cars mean for the consumer?

1. Accidents will become less common and insurance premiums will likely drop.

Currently, auto insurers add credits for many safety features like automatic braking and active disabling devices on vehicles. Self-driving cars and their manufacturers will be equipped with the latest technology and upgrades that eventually allow them to have full autonomy. This should significantly drop the number of accidents and the severity of those accidents over time, leading to a gradual decrease of insurance premiums, too. This could also change the need for insurance, what liability limits are adequate, and how many people purchase insurance in the future. Less people purchasing insurance could mean a drastic change in just how creative insurance carriers will have to be in order to appropriately price this risk, while still bringing in enough premiums to pay out claims.

2. Automakers will likely take care of the insurance risk and liability.

Manufacturers and automakers have already begun assuming the risk of their driverless vehicles and a few state regulators have also required that they assume the liability and insurance, too. Companies like Mercedes-Benz and Google have already assumed liability in situations where the vehicle was to blame for a crash. This may also mean that automakers will assume ownership over the vehicles. This shows just how much manufacturers and tech companies will stand behind the quality and safety of their vehicles and technology. For example, Tesla is so confident in their vehicles, they have even begun offering lifetime insurance for new Tesla buyers.

3. While driverless technology is becoming more popular, consumers should expect the unexpected.

New technology also comes with inherent risks and dangers that can only be adequately measured over time. We may see an increasing number of lawsuits as the state legislatures, insurance departments, auto manufacturers, and consumers navigate a new world of driverless vehicles. Insurance companies will continue to determine who, or what, was at fault during a claim, but that process may change as driver error decreases. The insurance industry will likely see a drastic change in how they insure these vehicles without drivers and how rating variables are determined, too.

Self-driving cars are equipped with new technologies that will significantly change the landscape of our freeways, tech and insurance industries, and consumer buying habits. While fully autonomous cars are still decades away, insurance carriers are already starting to prepare for the wave of the future. Are you interested in learning more? Contact a trusted insurance advisor at Sterling Coverage today.