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Self-Driving Cars To Transform Insurance and Other Industries
MarkWhittington writes: The advent of commercially available self-driving cars is about five years away, but already some are thinking about how they will disrupt the economy and how society operates in general. One industry likely to suffer is that of auto insurance. Since the vast majority of auto accidents are caused by human error, having more autonomous vehicles on the road will almost assuredly result in fewer overall accidents. Further, once we've transitioned to a society that mostly gets around using self-driving vehicles, most accidents will be the result of hardware and software malfunctions. Insurance for self-driving cars would more resemble product liability coverage than the sort of auto insurance we have today. Indeed, the technology will also likely impact diverse industries such as auto mechanics, taxi services, and health care, as well as policing.
Really? As long as liability insurance is mandatory, and comprehensive required for as long as you have load on the car, and as long as it takes action on the part of a state legislature followed by years of court battles to force insurance companies to lower rates, no, insurance companies will not suffer from lower accident rates.
In fact, in most states, they will probably use the changing market as an excuse to raise rates, knowing they will continue to sell the same number of policies while paying fewer claims.
Anybody who believes that the legal requirements for insurance will change for self driving cars is smoking dope.
Is that the same kind of years that are used by a lot of other technological advances? Because if it is, we won't have commercially available self-driving cars before 2040.
And by then, I hope they're freakin' flying cars, too.
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My bet... insurance companies will make it nearly impossible to own a human driving car. Since humans create accidents and they do not wish to pay out, liability coverage for a human driven car will increase greatly while robotic cars will drop. Eventually it will be nearly impossible to own a human driven car because of the costs.
Thirty years ago, you could just as easily have written the following:
"The world isn't going to rush out and buy cellular phones just because the people who want to sell cellular phones tell us how awesome they'll be. It just doesn't work that way."
Back then, Ma Bell ran the U.S. telecom industry. Nearly every home had a landline, with regulated rates. Public phones were everywhere. What possible motivation could people have to buy a $400 smartphone every two years, and pay $50 or $100 a month in connection fees on top of that? Yet here we are today.
Self-driving cars aren't going to overturn transportation because they're "awesome", but because they'll be so damned useful to so many people, not the least of which will be the large segment of the population that wants the convenience of personal transportation, but cannot drive.
Add to that the estimated 250 billion USD cost each year in the U.S. alone due to auto accidents, along with 35,000 deaths and millions of injuries (some permanently disabling), and there is in fact an enormous financial (and humanitarian) incentive to get self-driving cars on the road ASAP.
Twenty years from now we'll be looking back and wondering how we ever managed without autonomous transportation, just as we now wonder how we managed before the cell / smartphone era. People can kick and scream about the future all they want, but it's coming nonetheless.