Car Insurance and Driverless Cars

How is having no driver to rate going to change car insurance policies?

“Most accidents are caused by human error so if this factor can be minimized by taking control of the moving vehicle away from the driver, the accident rate should tumble. Data from the Institute for Highway Safety (IIHS) and Highway Loss Data Institute (HLDI) already show a reduction in property damage liability and collision claims for cars equipped with forward-collision warning systems, especially those with automatic braking. The exact percentage varied depending on the car manufacturer.” ~Insurance Information Institute

This is excellent news for all of us drivers on the road.  However, may not be such good news for car insurance companies.

Driverless Cars Are Coming

So we have started hearing more and more about them, but when are we going to actually start seeing these automated cars on the road? Well, we could start seeing the first automated ones by the year 2020.

So far we are already seeing cars that help us drive a lot safer because they are equipped with collision avoidance warning, blind-spot monitoring and lane departure warnings. There are also models coming out soon that will allow you to switch to driverless cruise control on the highways. So slowly we are getting there.

How This Affects Car Insurance

Having cars that decrease the number of accidents each year will be something that both drivers and car insurance companies are going to love at first. The car insurance companies are going to love it because they will still be bringing in premiums and now paying out less in claims, meaning a nice profit for them for the first handful of years. However, as the years go by drivers are going to have fewer and fewer car accidents on their records, which means a decrease in car insurance premiums and less revenue for the insurance companies.

Which also brings out the question of how insurance companies are going to rate car insurance policies, if the car is driving and not a human. If the vehicle is driving itself and gets into a car accident, that is going to be the fault of the company that made the vehicle, not the person sitting in the driver’s seat.

It could be that car insurance will eventually switch from us drivers being required to purchase it to be able to drive to car companies being required to purchase it to be able to sell their vehicles.