How will car insurance work without a driver? 4 Forecasts

While true self-driving cars are still years away from becoming commonplace, there are many questions about how these vehicles will function. Insurance companies are also throwing their hats in the ring on this issue, as insurers are unsure how to determine their policies.

4 ways in which self-driving cars will affect the insurance industry

To account for cars that need little or no driver involvement, insurers have raised complex questions about how to exist in a world without a driver.

Here are some insurance forecasts to consider.

1. Comparison websites will start showing policies for driverless cars

The landscape of car insurance is very “dog eats dog”, as many insurance companies have to compete with the market rate. For example, if you want cheap car insurance, you can go to cheapinsurance.com, which will find you quotes below the market price if you are a good driver.

However, in a landscape of self-driving cars, insurance companies have to offer driverless car policies, or risk being “eaten up” by larger companies that get involved early.

Deployment of self-driving cars will be slow over the next few decades, but as it intensifies, there will be companies that do not offer driverless insurance. If necessary, these policyholders will skip the ship to other insurers that offer insurance as a multilevel option.

2. Car manufacturers will take responsibility for fairness to the driver

According to the National Highway Traffic Safety Administration (NHTSA), 94% to 96% of all accidents are caused by human error. This means that self-driving vehicles can virtually eliminate fatal car accidents. But if so, will insurance be needed?

Insurance is not available to the policyholder due to the likelihood of an accident; this is a precaution when this happens. There is still a 4% to 6% chance of an accident.

However, drivers would not like a policy that charges them high fees per month, when they will probably never have an accident. To explain this, most experts assume that the burden will be on car manufacturers in most cases, unless they can prove that the accident was caused by the driver.

3. Premiums will fall significantly as accidents become less frequent

Since Waymo launched the first driverless car, insurers have been thinking about how to price their policies. It is not an easy question to answer, given that accidents will eventually become very rare. This is a good thing, as thousands die in car accidents every year.

That said, insurers will still see hiccups as the world shifts to self-driving cars. It is also envisaged that some people will still drive non-automated cars due to costs or preferences.

As for premiums, there is a forecast that they will fall significantly over a 30-year period, as insurers already offer first-class discounts for self-driving features. For example, if you have an Advanced Driver Assistance System (ADAS), your premiums will be reduced.

4. The insurance industry will struggle with reduced or no coverage

We cannot stress enough how important car insurance with full coverage is for your vehicle and wallet. However, most people do not actually buy car insurance with full coverage. Drivers usually stick to minimum coverage because it is cheap and often required by their state.

Full coverage insurance, despite its necessity, is no longer relevant to the drivers themselves. Once self-driving cars take off, full coverage may not be available.

This is because experts predict that the mandatory coverage provisions will not apply to self-driving cars because the risks are so low. If this is the case, the car insurance industry will have to turn around or die completely. Fortunately, the industry has at least a decade to adapt to these changes.

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