Self driving cars expected to have huge impact on cost of auto insurance

This image provided by Google shows a very early version of Google's prototype self-driving car. The two-seater won't be sold publicly, but Google on Tuesday, May 27, 2014 said it hopes by this time next year, 100 prototypes will be on public roads. (AP Photo/Google)

Autonomous cars are expected to impact the auto insurance market in a big way when they finally go on sale.

Although self-driving vehicles are still a thing for the future, insurers are already forecasting the “major impact” they will have on auto insurance premiums.

Because self-driving cars remove human error out of the equation, experts predict there will be less accidents on the road each year.

In turn, this will precipitate a sharp decrease in auto insurance premiums.

The strategy consulting firm PTOLEMUS recently released a report into autonomous vehicles and their impact on the auto insurance sector, concluding that by 2030 we will see over 380million self-driving cars on the road.

Experts suggest that this will lead to a 30% reduction in road accidents, which will also cause a decrease in auto insurance premiums.

Insurers Will Need To Overcome “Challenges” to self driving cars

 Because self-driving cars represent a very small risk for insurers, it is expected that insurers will need to shift their focus in order to reap continued success.

Owing to the fact that drivers will no longer be held to account for accidents, it is expected that insurers will look to the companies behind the development and production of the technology in self-driving vehicles, such as Google.

It is these companies that may be culpable for future road accidents because such incidents will more than likely be a result of a fault in the software of hardware.

Otherwise, insurance companies face testing times in the future; they will need to find new ways in which to serve customers, or face up to a future blighted by serious financial loss.

Will Titterington
  • 9th February 2016

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