As self-driving cars transform the road, what will happen to your insurance? While autonomous vehicles can offer many benefits, they can also pose emerging issues for insurance companies. In this article, we’ll tackle the shift in auto liability, evolving coverage needs and how these changes could affect your auto insurance premiums.
What are autonomous vehicles?
Autonomous vehicles, also known as self-driving cars, are no longer a figment of science fiction. Companies continue to invest heavily in this technology and the federal government is gradually developing regulations to help ensure safety and security. With some self-driving cars already available to the public, widespread adoption of these vehicles may be expected in urban areas within the next decade, marking the dawn of a new era in transportation.
However, as we approach this reality, industry professionals must contemplate the implications on current auto insurance policies and procedures, all centered around one question: Will the shift from human-driven to autonomous vehicles change the way we insure cars?
As human error diminishes, the responsibility for vehicle safety may increasingly fall on software developers and electronic device manufacturers. Consequently, self-driving car insurance policies might vary depending on the level of vehicle autonomy, creating an insurance market that is developing as quickly as the technology itself.
The Impact of Self-Driving Cars on Auto Insurance
The emergence of self-driving cars has the potential to fundamentally transform auto insurance. With the shift from human drivers to autonomous car technology, liability for accidents may move away from drivers and toward automakers and software companies. Additionally, the focus of car insurance coverage may shift toward cyber security and passenger protection.
Auto Liability Shifts
In the age of self-driving vehicles, who (or what) is liable when an accident occurs? This question is of the utmost importance in the ever-changing auto insurance industry. As vehicles move toward more complete automation, it’s likely that responsibility will shift from individual drivers to manufacturers and technology companies.
If this is the case, insurance coverage for autonomous vehicles may require liability insurance protection for both the vehicle’s autonomous modes and the human driver’s active control. Vehicle manufacturers may become more accountable for car crashes, which could cause insurance companies to shift autonomous vehicle insurance from personal liability policies for the driver to product liability coverage for the car itself.
New Coverage Needs
The new risks posed by autonomous vehicles may call for new insurance products. For instance, coverage for technology errors and cyber liability risks may become crucial for autonomous vehicle companies, and these needs may not be met by traditional auto policies.
The elevated costs of autonomous vehicle technology may be another aspect auto insurers have to take into account. Like with electric and hybrid vehicles, the repair and replacement costs of self-driving cars are generally higher than a typical vehicle, which could translate to higher annual premiums for policyholders.
Is self-driving car insurance more expensive?
In general, self-driving car insurance will be more expensive for policyholders. This is due to the increased repair costs and potential technology errors associated with self-driving cars. Let’s examine each of these factors and how they might impact policy premiums.
Errors in Technology
The rise of autonomous driving technologies could substantially impact insurance costs. Telematics technology in self-driving cars, which is part of the car’s self-driving technology, can include sensors, cameras, LIDAR and other devices, all designed to reduce the human errors that lead to accidents.
However, while these technologies are designed to anticipate and avoid imminent dangers, they are still at risk of malfunction or erroneous action, especially since this technology is in its infancy. This potential for error introduces a new risk factor that insurance companies may have to consider when determining premiums for self-driving car policies.
Increased Repair Costs
Although autonomous driving technology has the potential to minimize auto accidents, it escalates both the complexity and the cost of repairs. Like electric vehicles, self-driving cars require specialist mechanics and expensive replacement parts. This increase in repair costs, even for minor collisions, could contribute to higher insurance premiums for owners of self-driving cars.
Insurance Tips for Self-Driving Car Owners
Adequate preparation is key as we transition to autonomous driving. One crucial step is to understand that self-driving vehicles may require different insurance coverage, such as policies that account for autonomous technology malfunctions.
Existing insurance policies should be reviewed with your insurance broker for clauses that may restrict or exclude coverage when autonomous systems are engaged in a vehicle. This can help you determine your coverage needs and if changing auto insurance providers is needed in order to obtain adequate protection.
It’s also important for drivers to stay updated on the legislation surrounding autonomous vehicles. Changes in requirements and compliance can significantly affect your insurance needs. As your insurance broker, Higginbotham can help you stay aware of these changes.
Protecting Your Autonomous Vehicle
As autonomous technology becomes increasingly common in vehicles, self-driving car owners may face a shift in auto liability and insurance coverage needs. Understanding these changes can be difficult, but Higginbotham is here to make it easier. We’re ready to help you maneuver through this new landscape and secure insurance coverage for your autonomous vehicle. Get in touch with a member of our team today and experience the Higginbotham difference.
