Here’s How Self-Driving Cars Will Impact the Automobile Insurance Industry in the Future
A self-driving car might sound like a gadget straight out of a sci-fi novel. Yet, with leading automobile manufacturers like BMW investing in self-driving technology and research, these futuristic cars could soon be a reality. In fact, industry experts predict that these smart vehicles could very well be up and running by 2040.
Self-driving cars will no doubt revolutionize the automobile industry. But, what about their effects on car insurance? Will there be any impact? To find out, let’s look at how self-driving cars will affect the automobile insurance industry in the near future.
A change in liability
A self-driven vehicle is one that can get from point A to point B without a human driver. In such a scenario, if an accident occurs, who really assumes liability? According to industry experts, the liability might switch over to the manufacturer. This might be hard for some to believe. However, auto industry giants like Volvo already accept liability when their car’s self-driving system is at fault. Moreover, human error is to blame for a whopping 94% of accidents so, perhaps the number of road mishaps will steadily decline when self-driving technology takes over. Therefore, manufacturers may not have any qualms about taking liability for their vehicles.
The kind of insurance needed
The arrival of self-driving cars is bound to see a drop in the number of road accidents. If you take the human out of the equation, artificial intelligence systems may actually be able to navigate routes and situations with close to 100% accuracy through their advanced systems. This may leave many wondering whether car insurance will be required at all.
The answer to that is a resounding yes.
A self-driving vehicle will still face the possible risks of damage from man-made disasters such as riots, natural calamities such as floods, as well as incidences of fire, and theft. Furthermore, there may be occurrences of malfunction that could lead to mishaps. Technology may evolve but insurance will always play its part in ensuring that you have a financial safety net incase things go awry.
Lowered costs of premiums
Many auto industry experts are also of the opinion that the arrival of self-driving cars will see car insurance premiums drop. And, there is a reasonable explanation for this belief.
When vehicles are powered by artificial intelligence, there will be a lowered risk of road accidents. This effect can already be seen in cars that are fitted with autonomous driver assistance systems. Cars with these features have been reported to face a much lower chance of being involved in road mishaps. Some of these features include lane change assist, forward collision warnings, pedestrian alert systems, and lane keep assist, among others. With the added safety that these autonomous systems offer, car insurance providers face much lesser chances of being hit by claims. So, in turn, they lower their premium rates.
By that logic, the arrival of self-driving cars may result in insurance providers slashing their prices to attract customers while also ensuring that coverage is accessible and affordable as an essential product for vehicle owners.
Till the first truly independent self-driving car hits the road, we can only speculate how the future will be. Yet, what we do know is that car insurance is a must-have financial product for every vehicle owner, now and in the future too. Good coverage for your vehicle will let you drive at ease without having to worry about paying through your nose if a mishap occurs. We hope this article has been informative. Drive safe.