One of the most talked about technologies today is self-driving cars. While the idea of a vehicle that doesn’t require a skilled driver is incredibly fascinating, there are a whole host of issues that come with having autonomous vehicles on the road. From sudden accident scenarios to system breakdowns, it is entirely possible that having cars that virtually think for themselves could cause more harm than good when it comes to the number of incidents that occur. However, advanced safety features could also lessen the severity of accident damage and injuries.
Another concern is insurance claims and whether there will even be a need for policies in the future. How will vehicles that operate with little or no driver control affect the insurance industry as a whole? Here are a few things to know.
Understanding the State of Current Technology
As of the end of 2015, the technology in self-driving cars is limited. Google has worked hard to spearhead the campaign and is currently testing vehicles (many without steering wheels) in some urban areas. And, according to the Insurance Information Institute (III), many other auto manufacturers are following suit by incorporating more automation and safety features within their newest models. Most of these firms are combining the tech with the ability of a driver to takeover control in the event of a sudden incident—such as a child running onto a road or an instantaneous road hazard. The exact timeframe as to when fully automated self-driving cars will be available to consumers is still unclear.
Manufacturers Are Looking to Increase Safety (Which Affects Claims)
Studies by the Insurance Institute for Highway Safety (IIHS) have found that these new, high-tech safety features included on today’s vehicles actually work to reduce the risk of an accident and can lessen the severity of injuries sustained during a collision. From an insurance claims standpoint, this means that the technology available now and in the future in terms of autonomous cars is leading towards smaller claim payouts over the next few years.
Evaluating Risk and the Overall Cost to Insure
One of the biggest challenges the insurance industry faces when self-driving cars become more prevalent on the roads is insurance claims. Companies that decide to make human interference in emergency situations null (such as Google’s design) run the risk of becoming liable in an accident situation. Furthermore, a policyholder’s driving history may become less vital in terms of underwriting and the history of an autonomous car’s make and model could be weighted more heavily. The cost of parts to repair one of these vehicles is also slated to be higher, which also affects the cost to insure.
Blending autonomous vehicles and driver controlled cars is also a consideration. While many auto buyers will certainly flock to this type of technology, not everyone will. Thus, insurance companies have to keep in the mind the risk of another driving causing a serious incident on the road.
Self-Driving Car Insurance is Still Important
When you think about an auto policy, it is important to remember that coverage encompasses more than just collision. Comprehensive situations—such as weather damage and theft—are all still realities when it comes to the self-driving car. While the weight of collision coverage may change with time, it seems reasonable that there will still be a need for an autonomous car insurance policy that encompasses non-fault incidents.
The fate of the insurance claims industry will certainly see changes in the next few years as the self-driving car becomes closer to flooding the market. However, the actual difference between policies now and the future still remain to be seen.
