The future of vehicles is the autonomous vehicles taking people around with little efforts from passengers. The driverless cars, which once seemed unreal, has now turned into reality and people are waiting eagerly to enjoy the effortless ride to places. But with few advantages, there is always a few costs to be paid and, in this case, the car insurance industry will be facing a huge dilemma about how the insurance claim will be set. As self-driven cars get common and become more advanced, interesting issues will crop up. From developing the potential of taking important driving decisions and avoiding casualties, the self-driven cars will also face the car insurance liability. Here are a few things which will decide how will car insurance work out for self-driven cars in the future and when self-driven cars hit the market for the public.
If this self-driven car, hits someone or meets an accident, who will be held responsible? Since no one is driving and the car is produced to drive itself, the manufacturers will be held accountable for the accident, given the evaluation and the technical errors because of which the accident took place. However, if the manufacturer is called for every accident, then the lawsuit charges will increase the cost for the manufacturer.
Experts assume that extensive tracking systems will be needed to determine the accountability and to determine who was at fault, the AI driver or the human. The litigation process will also become complex here.
The self-driven cars have high ended complex technology. Assuming that their repair cost will be high, the car insurance company is most likely to try to get rid of its liability for covering the repair cost, which is held responsible for.
Since the self-driven cars will be connected to networks for driving, locations, and upgradations, there are possibilities of hacking and this again poses threat to safety. The car insurance companies will have to determine how the damage caused by hacking will be dealt with.
Drop in Car Insurance Premiums
Car Insurance premiums are a recurring cost for insurance companies. With the self-driven cars hitting the roads, experts believe that there will be a sharp decline in the accidents, eventually. The driverless cars are safer when there are fully autonomous cars on the road. The decrease in claims will compel the car insurance companies to lower down the premiums.
Reduction in Personal Insurance Claims
Soon after the driverless cars are on the roads, the drivers will realize lesser need to have personal accident insurance thinking it to be not useful. People will soon start investing in legal coverages rather than on health and accident coverages.
How insurance companies can adapt?
Finding New Sources of Covering Costs and Generating Revenue
The driverless cars will definitely affect the insurance premiums invested in personal insurance and accident coverages. Insurers will have to find alternate ways to create and continue the streams of premiums cut off due to driverless cars.
Cybersecurity Insurance: With more automation, more software threats, cyber threats and hacking threats are posed. This will be the need of hour to cover cybersecurity under insurance.
Product Insurance: The products used in autonomous cars like sensors, chips can also be included as part of insurance as these are expensive and software bugs, memory or other technical problems.
Infrastructure insurance: Signal equipment, cloud servers and other supporting infrastructures which are enabling safety of the riders and the car, have the potential to cover the loss incurred due to reduced premiums or loss of interest in personal accident insurances.
The future of car insurance companies when dealing with vehicle insurance, there are some strategic choices to be made. The self-driven cars will bring a revolution in the ways we see driving. Specially, the insurance companies will have a bigger impact on its revenue. Thus, once we know that how will car insurance work out for self-driven cars in the future, there will be a paradigm shift in the approach of calculating car insurance premiums.
The data suggests that 94 percent of accidents caused due to avoidable human errors can be reduced by autonomous cars. But all of this is a prediction based on the experts and industry, but you never know how things pivot.