How Will Autonomous Vehicles Impact Auto Insurance?
Did you know that the Ontario government is already testing autonomous cars? Ontario became the first province to start testing driverless cars on their roads in 2016. With testing underway, suppliers, manufacturers, and insurance providers are quickly trying to get insight on how this will change the future of their businesses. Many are wondering just how different they will be from other vehicles that are already on the road? And how will this impact liability for drivers?One thing is for certain; there are going to be dramatic changes to the industry. And the current elephant in the room is the topic of insurance.How will autonomous vehicles impact auto insurance? To give you an inside look, here are some predictions from experts in the industry.
Change In Risk Profile
Autonomous cars will create a drastic change in the risk profile of automobiles. With more safety features being added to cars, there will be an expected decline in risk. And less risk means it will be more affordable to insure. But before any changes are officially made to policies, insurance companies will need to get a better grasp of how the new safety features will affect the risk levels before they can determine the true impact on insurance rates.
Potential For Lower Premiums
Safer cars mean fewer accidents and fewer claims. Experts estimate that the number of accidents could fall around 80% from current numbers. With auto insurance, claim frequency is likely to fall, potentially leading to lower premiums. That could mean lower insurance bills for many Canadian consumers.
New Providers In The Market
How will autonomous vehicles impact auto insuranceproviders? Many industry professionals expect that there will be an emergence of new insurance providers over the next 10 years. With a demand in trained underwriters, there will be a rise in companies with specialized autonomous vehicle expertise.
New Insurance Plans
Driverless cars won’t become the norm for decades, which means it will share the road with drivers who are still active behind the wheel. Insurance companies will need to find a way to write insurance policies that cover both types of vehicles. These policies will need to address who will be held liable when an accident occurs – the human, the machine, the supplier, or automaker – and will likely result in entirely new insurance plans.
Insurance Costs Being Passed Down
If insurance costs are passed down to automakers, they may consider raising the price of vehicles to cover any increases in their operating costs. To date, it’s not entirely clear how this would work out, but it is something to watch for as autonomous vehicles start to enter the market.
Autonomous cars will unquestionably have a major impact on the auto insurance industry. It will impact the type of coverage offered and the rates for consumers and automakers. Yet, the exact impact these cars will have on auto insurance is still to be determined, but it will definitely be something worth keeping an eye on.