How Will Self-Driving Cars Influence Car Insurance

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One of the most innovative inventions in the automobile industry is the introduction of self-driving cars, also known as autonomous cars. Such cars deploy several technological systems that work in conjunction with each other. The radar sensors fitted around the car detects the position of vehicles nearby. Autonomous cars also have video cameras that identify traffic lights and road signs and also keep track of other vehicles. Lidar sensors identify lane markings and detect the edges of the road. Besides, such cars come with a central computer that helps in controlling the steering, braking, and acceleration. With such advancement in technology, self-driving cars operate automatically and do not require a human driver.

Self-driving cars entail many benefits. Since these cars use computer systems, the chances for any human error are limited. This aids in the reduction of accidents. Additionally, a self-driving car aids in improving emission compliance and eases congestion on roads.

Impact of autonomous cars on the car insurance industry

Self-driving cars have implications on numerous industries, the major being the car insurance industry. Insurance companies generally calculate the insurance rates based on the human attributes. These include driving records, claims made in the past, besides others. Some insurance companies also make use of devices that help them monitor the speed of the car. In cases of safe driving, auto insurance providers offer discounts on the premium amount. Besides, car owners also benefit from lower premiums if they have not made any claims in the past.

With self-drivingcars, this model shifts from the attributes of the car driver to those of the autonomous vehicle. As mentioned above, autonomous cars will greatly reduce human error, which is a cause for most accidents. However, accidents that occur will more likely point to the fault of the vehicle, not humans. The blame, in turn, will pass on to the manufacturers for developing cars that do not adapt to various situations. These situations could vary from crossing a red signal to exceeding the speed limits. Automobile manufacturers, in such cases, would be held responsible for a crash, and may even become liable for third party claims. The car manufacturers will have to prove that the technology used in the making of the car was not the cause of the crash.

As of today, the exact impact of self-driving cars on the insurance industry is not known. With the passage of time, new insurance rules may evolve. Self-driving cars will make vehicle insurance providers rely on telematics devices. These systems record information about the number of miles the car is driven, the habits of the driver, and how quickly the brakes are applied. Insurance companies may even collaborate with automobile manufacturers for sharing the data obtained through such telematics devices.

Another possible impact of the introduction of self-driving cars is that manufacturers may even become insurers. In all probability, the existing auto insurance may be replaced by product liability insurance for such autonomous cars. This insurance would then cover all the risks related to failures of computer systems. Thus, self-driving cars will have a significant impact on the car insurance industry.