Automated car insurance refers to coverage for self-driving vehicles. Because they usually offer advanced safety features, the insurance premiums on self-driving cars may be lower than insurance fees for regular automobiles.
What Insurance Policies Do Autonomous Vehicle Companies Need?
The following insurance policies are necessary for autonomous vehicle companies:
- Auto Liability Insurance: Auto liability insurance policy covers the medical treatment expenses of third-party accident victims.
- Physical Damage Coverage: Physical damage coverage covers all bills that the owner of the autonomous vehicle spends to replace or repair their car.
- Technological Errors & Omissions: When an autonomous carmaker creates a vehicle, there is a possibility that the invention may fail. A product defect in a self-driving car can lead to road accidents, causing bodily injury to people and physical damage to other vehicles. Autonomous vehicle companies need to insure themselves against such disasters, says Founder Shield.
How Will Autonomous Vehicles Change the Insurance Landscape?
Considering the innovative safety features of autonomous vehicles, several experts have speculated that autonomous cars may alter the insurance landscape. Some proponents of this belief even suggest that it might put an end to vehicle insurance.
Here are the reasons for their speculation, according to The Digital Insurer:
Fewer Claim Payouts
The Insurance Information Institute states that physical damage and liability claims from car accidents have maintained the same frequency over the last ten years. Within the same period, insurance fees for bodily injury coverage have increased by 30 percent.
Since self-driven vehicles have improved safety features, chances are the number of accidents and injured victims will decrease if more drivers use these cars. As a result, the cost of insurance claims will reduce drastically.
Cheaper Insurance Premiums
According to The Simple Dollar, research from Accenture, an insurance company, and the Stevens Institute of Technology in New Jersey indicate that the cost of insurance premiums will fall by 20 percent. John Cusano, Senior Managing Director at Accenture, even claims that most insurance companies are bracing themselves for this loss.
Liability Shift
Increased usage of self-driving cars will shift the blame of accidents from drivers to manufacturers. Although accidents may still happen, they will most likely be due to product defects rather than poor driving. As a result, manufacturers, rather than drivers, will have to pay for physical damages and bodily injury.
Less Need for Insurance Underwriters
Self-driving cars have telematics features and usage programs that can read drivers’ driving habits. The implication of this is that fewer insurance companies will need underwriters.
Will Self-driving Vehicles Bring Down the Cost of Car Insurance?
Although self-driving cars are safer than regular vehicles, using them may not earn you a reduction in your insurance fees.
Is Insurance Needed for Autonomous Vehicles?
Before you register any vehicle in the United States, you must prove that you have insured the car. This law does not make exceptions for autonomous vehicles.
Data from the Insurance Information Institute says that the National Highway Traffic Safety Administration reports that 94 percent of road accidents occur due to reckless driving. This means that the rate of motor accidents will reduce as more people use self-driving cars. However, some accidents may still happen because of manufacturing errors. These accidents will have victims, and the owner of the autonomous vehicle will need medical and repair bills. So, you still need to insure your autonomous car.
What Are the Usual Causes of Car Accidents in the U.S.?
Research from the Insurance Information Institute reveals that roughly 6.5 million car accidents occur yearly in the United States. Common reasons for these accidents are drunk driving, speeding, and lack of concentration while driving, says The Balance.
Are Self-driving Cars Poised to Transform the Automotive Industry?
Self-driving cars will eliminate drunk driving and speeding, which are common causes of road accidents. Road accidents are more likely to reduce in the coming years. Autonomous vehicles will also use their cutting-edge technology to control traffic and prevent road congestion.
Which Agency Developed the Classification System for Defining Driving Automations for Motor Vehicles?
The Insurance Information Institute reports that the Society of Automotive Engineers designed the classification system for defining automated driving for cars. So far, the United Nations and the U.S. Department of Transportation have adopted this classification system.
What Are the Top Risks for Autonomous Vehicle Companies?
Manufacturers of autonomous vehicles in the United States face the following risks:
Legal Risks
Although the U.S. legislature has passed some bills to regulate autonomous automakers, there are no approved national laws to guide these manufacturers. Nevertheless, the House has enacted the Self-Drive Act, and the Senate is taking steps to make self-driving-related laws. In the absence of uniform guidelines to regulate autonomous vehicle manufacturers across the country, the future of the automated vehicle industry remains unpredictable.
Low Buyer Trust
Recently, some Tesla self-driving cars have been involved in fatal road accidents, according to The Simple Dollar. This has reduced the level of trust that drivers have in autonomous vehicle companies. In the long run, this lack of confidence may discourage people from buying self-driving cars. Autonomous car makers will have to find a way to restore customer trust before generating substantial profits from the vehicles.
What Are the Major Automakers and Technology Companies Testing Self-Driving Cars?
The following vehicle manufacturers and technology companies are currently testing self-driving cars:
- Nissan
- Uber
- Ford
- Toyota
- Tesla
- Lyft
- Waymo
- Mercedes
- Apple
- Volvo
What Are the Companies that Are Working on Self-Driving Vehicles Research and Development?
While several companies are investing in the research of self-driving cars, major brands have made the most significant investments in autonomous vehicle development. These manufacturers are:
- Tesla: Tesla already makes cars with Autopilot features, and it plans to introduce software updates to improve the quality of its autonomous vehicles.
- Uber: Uber is developing autonomous vehicles that may eliminate the need for drivers. The brand has tested some of its self-driving cars on major U.S. roads.
- Waymo: Waymo, an initiative that was renowned as Google’s self-driving car project, is making autonomous cars. Residents of Phoenix will get a chance to test Waymo’s self-driving vehicles in the company’s early rider program.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
Background on: Self-driving Cars and Insurance | iii.org
Four Ways Autonomous Vehicles Will Change Auto Insurance | the-digital-insurer.com
How Self-Driving Cars Affect Insurance | thesimpledollar.com
Insurance for Autonomous Vehicles & Self-Driving Cars | foundershield.com
Insurance Coverage for Driverless Cars | thebalance.com
Tesla Insurance: Everything You Need to Know |caranddriver.com
Self Driving Car Insurance: What You Need To Know | caranddriver.com
Car Insurance | caranddriver.com
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