Although self-driving cars aren’t widely available to the public (though self-driving Teslas do exist), insurers are already preparing for when they do. There’s no doubt that self-driving cars will change the way we pay for insurance, but some insurers don’t know to what extent.
What Are Self-Driving Cars?
According to insurers, self-driving cars, or autonomous vehicles, are able to detect the surrounding environment using AI, sensors, and global positioning coordinates. Although these cars drive themselves, drivers must still pay attention to the road while operating them.
There are 5 levels of automation: driver assistance, partial automation, conditional automation, high automation, and full automation. Self-driving cars will eventually become fully automated, which may remove the need for insurance entirely (unless it’s given to car manufacturers).
How Self-Driving Cars Affect Insurance
Self-driving vehicles will impact the insurance industry, as they’ll change the type of coverage available, how premiums are determined, and how much you pay. Insurance comparison sites like Cheap Insurance will still help drivers save on car insurance but will include more options.
While insurers are confident change will happen due to self-driving vehicles, their exact impact isn’t clear. But insurers must act quickly, as cruise control and park assists are already common.
Some car manufacturers believe all cars will have some level of automation by 2030, but no one knows for sure. Once self-driving cars become the industry standard, insurers can make accurate pricing tables based on the level of automation in the car, not on traditional risk factors.
How Self-Driving Insurance Works in an Accident
As stated, insurers don’t know how self-driving vehicle insurance will work, but most experts agree that liability won’t fall to the driver in the event of an accident, with few exceptions.
If the driver was manually operating the vehicle or rigged the car to the point that it became unsafe, then the driver would be at fault for the crash. In most circumstances, the car’s creator (i.e., the person who wrote the blueprint), coder, and/or manufacturer would take the blame.
Once autonomous cars become widely available, governments will change the rules and regulations surrounding accident law, which is more likely to influence blame for accidents.
Are Self-Driving Cars Safer Than Manual Cars?
Self-driving vehicles will eventually be safer than manual cars, but the technology isn’t there yet. Most commercially available self-driving cars aren’t reliable enough to be considered safer than manual cars, which makes consumers worry that they aren’t worth the cost or investment.
According to a Centre of Data Ethics and Innovation report, the public has little tolerance for driverless car crashes. Even if autonomous cars are safer, drivers want them to be 100% safe.
With that said, driverless vehicles could reduce collision deaths by as much as 80%. More than 46,000 people die in a car crash every year, meaning self-driving cars could save 36,800 people annually. These vehicles may save even more people once they become fully automatic.
How Current Self-Driving Vehicles Will Affect Insurance
Consumers will drive partially and conditionally automated vehicles before they get their hands on high and fully automated cars, meaning insurers will have to write rates for the former two options first. Since these cars are new, they’ll have to account for any equipment malfunctions.
As a positive, insurers can monitor vehicle activity, which makes policy writing more accurate and efficient. As a negative, insurers will need to pay more for collisions, even though the collisions themselves will be cheaper claims because self-driving technology is expensive.
Finally, collision claims will take longer to process because the machine is likely at fault for the accident. This makes it harder for insurers to repair self-driving vehicles in a timely manner.
Last Updated: December 9, 2022
