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Self-Driving Cars: The Future For The Insurance Industry

On Behalf of | Sep 28, 2018 | Uncategorized

The notion of a self-driving car is no longer a far-fetched fantasy or some scene from a movie about the future. The reality of vehicle autonomy is very much a technology of today. Self-driving cars are now beyond the makings of just Tesla, as a British company recently announced the development of a new chip. The Arm Cortex-A76AE is said to be a game-changer, possibly bringing fully self-driving cars as early as 2027. The company boasts the chip could be the beginning of the future for full autonomous technology with safety being its number one priority.

However, even when driver safety is at the forefront of this sweeping technology, there is always room for error and then of course accidents and injuries. What does the potential for a major increase in self-driving cars mean for the insurance industry? Will there be just as much of an impact on insurers as it will be for drivers?

Big Idea Predictions

While it is safe to say that no one knows for sure how much of an impact or change self-driving cars will have on insurers, there is speculation at best. There is still some time until the impact really goes into motion, as experts don’t see self-driving really hitting consumers until 2040.

Nonetheless, here are some of the more broad-sweeping predictions being made by industry experts:

  • Liability shift: Rather than the driver (who often carries a personal liability policy) it will be the automakers who will assume liability. Although this may seem unlikely, it is already happening. Automakers like Volvo and Mercedes-Benz have accepted liability in some cases where the self-driving system was at fault.
  • Lower insurance premiums: If the self-driving car industry claims are true that accidents will drop significantly, then insurance premiums could also drop. With the likelihood of an accident becoming a rarer occasion, the cost of insurance could go with it.
  • Removing mandatory insurance: Many states currently require drivers to carry personal auto insurance coverage. But with less need for insurance coverage, it could even mean these mandates are dropped as well. This could have a huge impact on the insurance industry and may cause difficulties.

The one assumption we can make is that despite these predictions, it is too early to fully understand how vehicle autonomy will really impact the insurance industry.