Will Self-Driving Cars Change Auto Insurance Policies?

Ever since the invention of the automobile, drivers have fantasized about a self-driving car. Today, companies such as Google, Volvo and Mercedes are working together on vehicles that require minimal input from their drivers. While some drivers welcome the idea of cars that can drive themselves, this technology does raise questions about how auto insurance providers will change their policies. After all, how can an auto insurance provider determine fault between drivers if the cars drive themselves?

Auto Insurance and Self-Driving Cars

Internet search engine giant Google will reportedly test out their self-driving cars as early as this summer. The first versions of these cars were converted Lexus sport utility vehicles. These cars will still allow human drivers to take control when necessary, so they will still require auto insurance. Other luxury automakers, including Mercedes and Volvo, are also developing driverless technologies. Drivers of these cars may be eligible for auto insurance discounts as the industry catches up with the technology.

“Significant Reduction” in Auto Insurance Rates

A study by the RAND Corporation found that operators of self-driving cars would see a “significant reduction” in their auto insurance premiums. An insurance analyst told CBS News that, since “so many accidents are caused by human error”, the number of accidents in self-driving cars would be lower than today’s drivers experience. In turn, auto insurance rates on self-driving cars would be sharply lower than those with human operators.

Driverless Cars Impact Auto Insurance Plans

Just as self-driving cars will change how human operators function in these vehicles, the advent of driverless cars on highways and city streets is expected to change how auto insurance providers operate. The additional safety measures found in prototype vehicles may allow some owners to qualify for auto insurance discounts. Vehicles without a human operator option may exempt drivers from carrying auto insurance at all. Owners of vehicles that allow for human operators could see premium payments split between the owners and manufactures.

Could Auto Insurance Burdens Shift?

The auto insurance providers for driverless cars could move much of the burden of premium payments from the owners to the manufacturers. The manufacturers would then include the auto insurance payments as part of the vehicle purchase payment plan. In these instances, the insurance providers and manufacturers could collaborate and offer coverage options for buyers. The process could resemble how drivers purchase options on existing vehicles, allowing for one-stop shopping and overall rate reductions.

Source: CBS News

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