Will Self-Driving Vehicles Eliminate The Need For Auto Insurance?
There are over 30,000 deaths each year on the roads of the United States due to operator error… but not for long if self-driving vehicles have anything to say about it. With autonomous vehicles targeting to eliminate 90% of accidents caused by humans, they have the potential to save 27,000 lives per year. That’s 27,000 families that weren’t impacted by a sudden, unplanned, tragic accident.
Looking to accidents as a result of driving under the influence, autonomous vehicles promise to bring major reductions in incidents and related accidents. Nothing different must be done to save lives… the passenger only needs to get in the vehicle as normal and, instead of having to drive home, the vehicle will bring them home safely and — most importantly — without causing harm to others on the road.
The improved safety of autonomous vehicles has been widely discussed, but the massive reduction in traffic accidents related to operator error presents a big opportunity for drivers, as the improved safety should allow them to save money on insurance as well. If accident rates drop across the board by 90%, the need for auto insurance drops accordingly.
What data do we have to support claims that accident rates will go down? Looking at the Google Self-Driving Vehicle program, the cars have put in over 1,000,000 miles on public roads with a total of 17 accidents. That isn’t encouraging until we look at the number caused by the Google-bots… which is zero… and you had better believe that they have the data to prove it!
In parallel to the development of fully autonomous vehicles, “Active Safety” and other “Advanced Driver Assistance Systems” (ADAS) features are rapidly arriving in new vehicles in all tiers — from Nissan, Mercedes, Kia, Tesla… — at all price points. These Active Safety features represent the early stages of the progression towards fully autonomous driving, while also starting to earn the trust of drivers as vehicles take a more active role in driving.
Looking past safety statistics, connected vehicles have the potential to provide extra data to insurance companies to allow safe drivers to get the lowest insurance rates possible.
Stepping back and looking at the insurance industry as a whole, it is obvious that a full frontal assault on the status quo is going to be causing some disruption in the very near future. Will insurance companies follow the many auto manufacturers that were caught flat footed by the electric vehicle revolution, or will they recognize the threat to business as usual and respond with some innovation? Time will tell.
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