Driverless Cars Bring Uncertainty to the Car Insurance Industry

Most of the time, we don’t need need to think about car insurance. Every now and again accidents occur, forcing drivers to break out those little-used plastic cards for an information swap. It’s how we hold each other accountable on the road. But what if drivers didn’t control their cars’ actions? Talk of futuristic “driverless” cars has insurance companies scratching their heads.

Expected to reduce accidents and increase accessibility, driverless cars are one of the latest technologies being developed, according to Mercury News. These motorized cars are already being tested on the road in California and require no human interaction to navigate traffic. Considered to be the next step in driving technology, driverless cars are expected to be available and road-ready by 2015. Whether you’re looking for an American, European or Australian car insurance quotes comparison, a world with driverless cars would change the game for good.

As the insurance industry braces for this seismic shift, questions of implementation are at the forefront, while the idea that insurance companies could one day be obsolete looms.

Risk/Reward

The potential to drastically reduce accidents is one of the major forces behind the driverless car movement. As accident rates fall, so should insurance rates. When driverless cars hit the roads, “insurance companies are going to look and analyze the risk, and insurance will be made available,” Insurance Information Institute spokes person Jean Salvatore said, according to Forbes.com.

Theoretically, since drivers wouldn’t control the actions of driverless cars, they shouldn’t be held responsible for accidents. If every driver swapped out his or her conventional vehicle for a driverless car, consumers may argue that automakers should bare responsibility for accidents. It would be their technology that causes problems, after all. Who knows where technology will take us in the next 20 years, but with driverless cars, the insurance industry sees potential for a radically different world.

Irrelevant Insurance?

The worst-case scenario, for car-insurance providers at least, is one in which car insurance becomes obsolete. If driverless automakers feel confident in their products’ perfect driving performance, they may feel comfortable paying for any damage that might occur. In short: roads without accidents mean drivers without car insurance. Initially, car insurance providers will have a place in this new landscape. “If driverless cars were to become more of a reality, insurers would likely need to create a new auto insurance product,” Insurance Information Institute spokesman Michael Barry said, according to Insurancequotes.com.

Author : James Rivera

An environmentalist and freelance writer, James enjoys covering car innovations that support sustainability.