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Will Autonomous Cars Be the Insurance Industry's Napster Moment?
An anonymous reader writes: Most of us are looking forward to the advent of autonomous vehicles. Not only will they free up a lot of time previously spent staring at the bumper of the car in front of you, they'll also presumably make commuting a lot safer. While that's great news for the 30,000+ people who die in traffic accidents every year in the U.S. alone, it may not be great news for insurance companies. Granted, they'll have to pay out a lot less money with the lower number of claims, but premiums will necessarily drop as well and the overall amount of money within the car insurance system will dwindle.
Analysts are warning these companies that their business is going to shrink. It will be interesting to see if they adapt to the change, or cling desperately to an outdated business model like the entertainment industry did. "One opportunity for the industry could be selling more coverage to carmakers and other companies developing the automated features for cars. ... When the technology fails, manufacturers could get stuck with big liabilities that they will want to cover by buying more insurance. There's also a potential for cars to get hacked as they become more networked."
Analysts are warning these companies that their business is going to shrink. It will be interesting to see if they adapt to the change, or cling desperately to an outdated business model like the entertainment industry did. "One opportunity for the industry could be selling more coverage to carmakers and other companies developing the automated features for cars. ... When the technology fails, manufacturers could get stuck with big liabilities that they will want to cover by buying more insurance. There's also a potential for cars to get hacked as they become more networked."
Insurance is all about a balancing act between charging enough premiums to cover the pay outs as well as whatever profits the company can get away with. Autonomous cars will probably not be able to get away with a zero liability claim, so there will still be a smaller premium to be charged to go along with those smaller payouts.
New Hampshire does not require auto insurance.
0 accidents and 0 tickets for the past 21 years. Defensive driving certificate for several years. My company still wanted to charge almost $1,100 for 6 months to cover 2 vehicles. one is a 2011 and one is a 1997. Told them to pike off and went with a reputable company. I am now paying around $400 for the same coverage. I totally agree. It has nothing to do with payout vs premium. It is more based on pure greed.
One of the major reasons traffic deaths went down is we redesigned cars so that instead of being able to withstand a crash without injury to the car, they absorb the crash in a 'crush zone', meaning the car itself takes the damage instead of a person.
In addition, the value of cars has risen over that time, as we put in a lot more features on them. So damages went up
excitingthingstodo.blogspot.com
Yet still New Hampshire has one of the lowest rates of uninsured drivers at 11%. Mind you, if you opt to not get insurance, you are still on the hook for costs of bodily injury or property damage resulting from a car accident you caused.
Personally, I think that car insurance, like house insurance is one of those things you are stupid not to get, even if it isn't required. You stand to lose a whole lot of money if something goes wrong. In the case of a car, that could be accidentally running over a person or crashing into expensive property. In the case of a house, if your house catches on fire, or somebody steals all your stuff. There cost of liability and theft insurance is usually very low for houses and cars, and it's pretty stupid to not get it, even if it isn't mandatory by law.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.