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Will Self-Driving Cars Destroy the Auto Insurance Industry? (siliconvalley.com)
An anonymous reader quotes an article from the Bay Area News Group:
Imagine your fully autonomous self-driving car totals a minivan. Who pays for the damages? "There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson. Instead, the manufacturer of your car or its software would probably be on the hook... Virtually everything around car insurance is expected to change, from who owns the vehicles to who must carry insurance to who -- or what -- is held responsible for causing damage, injuries and death in an accident."
Ironically, if you're only driving a semi-autonomous car, "you could end up in court fighting to prove the car did wrong, not you," according to the article. Will human drivers be considered a liability -- by insurers, and even by car owners? The article notes that Google is already testing a car with no user-controlled brake pedal or steering wheel. Of course, one consumer analyst warns the newspaper that "hackers will remain a risk, necessitating insurance coverage for hostile takeover of automated systems..."
There is no reason that could not also be provided by the company. The remainder would be a conventional policy for the times you're driving manually. Perhaps rather different due to all the data available.
Justice!
Lose their captive market? The people will just have to move on to a different line of work. And there are other things to insure besides cars.
“He’s not deformed, he’s just drunk!”
If I have an automated car and I had to have (driving, expensive) insurance for the times I switched it to manual then I wouldn't want a car that could be switched to manual. If companies can confidently stand behind their products, then it isn't a problem for them to accept responsibility because they won't be causing problems. Therefore, I would expect AI insurance to be around the same price as for a $20-30K piece of property that may get ruined due to reasons beyond the owner's control. Judging by the my property insurance cost, that should be around $30 a year.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
The nature of insurance just changes, from covering individual drivers to insuring manufacturers and fleet operators for product liability. The biggest impact will be on the legal profession: a whole army of bottom feeders will disappear, to be replaced with smaller additions to corporate lawyer ranks. A whole genre of late-night TV advertising will be replaced by ads for body mods, escort services and medical tourism services.
I'm sure I'm not alone among IT professionals when I confess I cry myself to sleep with heavy liquor each night, while pondering the future of the insurance industry.
I'd bet self-driving car makers will be willing to spend tens/hundreds of millions trying to prove the liability isn't theirs.
I foresee a lot of lobbying from Google etc to change the law regarding compensation or at least making it the car owner's liability.
Victim sues the car owner then car owner is forced into arbitration because of the car software's EULA.
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We've had similar discussions in the past.
This is just one example:
https://news.slashdot.org/story/15/07/31/1835207/will-autonomous-cars-be-the-insurance-industrys-napster-moment
See all the Slashdot articles:
https://www.google.com/#q=autonomous+insurance+site:slashdot.org
"There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson,
Bullshit. It's your car, so you're responsible for it.
Because I don't want some self driving fucktoy carting me around. Neither does 100,000,000's of other Americans.
""We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years." -david rockerfeller
There will have to be millions of "driverless" cars on the road to be mathematically meaningful in the calculation of insurance rates. How long will this take? And a more interesting question than "What will happen to insurance?" is: who will the owners of these cars be? Aside from the extremely wealthy for whom such cars will be a status symbol, we already see large corporations as the earliest adopters of the as-yet-nonexistent technology, and their corporate interests will lead them to put certain laws in place to make sure they are NOT AT RISK from accidents caused by these cars. So regardless what happens with insurance, you can be sure that Joe Driver is going to get screwed in this situation.
This will be the greatest push for genuine no fault insurance system. A few states have them, California tried but the industry got so deeply involved they gutted the bills and created a Frankensystem so convoluted and confusing that it actually costs more and makes the lawyers more money.
errr....umm...*whooosh* *whoosh* Is this thing on ?
because owning your own car will still require it and everybody wants to own their own car. If fewer people can afford cars they'll just raise the rates, because it's a law.
But socialized medicine might. I'm old enough to remember the debates around mandatory insurance and they were all based about trotting out poor little boys and girls that got their shit wrecked in a wreck and how they couldn't afford the doctors. Give us socialized medicine and a proper safety net and it pretty much makes car insurance obsolete.
Which is yet another reason we'll never got it.
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They can sell anything.
What will happen is that many municipalities will see a dramatic loss of income from traffic and parking* violations. That could indeed be devastating. People are gonna have to fire up the old still and go back to bootlegging to make a couple of bucks.
*since the car can go off to find a space by itself, or simply drive around the block a few times.
“He’s not deformed, he’s just drunk!”
Perhaps it can also destroy police speeding traps and the era of ticket quotas.
I doubt it, though.
Self-driving cars are utter vaporware. They are the automotive equivalent of Duke Nukem forever.
Yes, there will be expensive driving aids on cars, but no one here will see ubiquitous cars that drive themselves.
The first truly self-driving cars will probably be flying cars. Which means never. So can we please stop with the self-driving cars horseshit?
You are welcome on my lawn.
Wow, that's good to know. That means I don't need home insurance either, because I'm not operating the house; I'm just living in it like a resident in a hotel. Clearly the person who built the house will be liable. Oh, wait ....
Could we please put aside these laughable "self-driving cars will be sued out of existence" arguments once and for all? Liability insurance can be purchased to cover situations in which you do not directly control events. For example:
I own a house, and I pay insurance to (among other things) protect myself if I'm sued by people who may injure themselves on my property, even if I'm not at home. My insurance company is perfectly happy to sell me liability insurance, even for property I don't live in.
It will be the same with self-driving cars. If you own one, you'll be able to buy liability insurance for it, just as you would for any other vehicle. The insurance industry will adapt perfectly well.
The auto insurance industry? Probably not. I suspect it will simply adapt. The organ transplant industry? Well, that's a different matter...
Ezekiel 23:20
Are almost always answerable with "no."
New headline: Will Good Editing Ever Come To Slashdot?
No.
New headline: Will Slashdot Ever Embrace Anything Besides Seven Bit ASCII?
No.
--
BMO
Insurance is for when there are dangers you can't prevent. If you make such big improvements that you don't need insurance any more, then that is a good thing. If someone discovered a cheap effective cure for cancer, diabetes and heart disease, then we'd laugh at anyone going, "well this is bad news for the health insurance industry".
I'm okay with driver-less cars, so long as the remaining drivers have to complete a high performance road school to keep their license.
If I were to create a new slashdot I would still not want to allow emoji.
For cars that can be driven by a human.
Farmers for example, how does a self driving car manage to get off road and find its way to where they need to go. Transport trucks, backing a 40ft trailer to a bay door. People who tow boats or camper trailers or any traler for that matter.
I'll still need to get insurance for my primary mode of transportation...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
insurance companies know how to structure rates, been at it for centuries.
also, the cars we have now are vulnerable to hacker takeover. nothing new there except I expect the autonomous ones to be more hardened just because of manufacturer mindset
criminal liability issues will need to be worked out as well. All the way from tickets to trespassing to Vehicular homicide
Insufficient maintenance being one.
So I reckon that either accidents will involve a great deal of argument between the little guy (who bought the SDC) and the big guy (manufacturer) with the big guy making all sorts of accusations and demanding proof that every last servicing requirement had been carried out by an approved service agent. Or the car will remain the property of the manufacturer (or fleet owner) and it will be leased to the notional user. Thus removing the car's passenger from liability. But leaving them with a large monthly bill for ensuring the vehicle is kept mechanically perfect.
politicians are like babies' nappies: they should both be changed regularly and for the same reasons
Either all of that, or he's wrong and a legal standard will be set where it is the owner of the equipment who is liable, whether it is operating in autonomous mode or not. If that's the case, nothing much will change.
I'm still half of the mind that autonomous cars are already in a Segway type situation, where you have all these wonks predicting that they're poised to transform all of society etc. but the logic just doesn't hold up:
A.) Americans like driving.
B.) Car manufacturers market various car models with features that cater to the fact that Americans like driving, because it's profitable.
...and the biggie...
C.) Does anyone really believe autonomous cars will be sold to consumers without the ability for a human driver to take over in emergency situations? But if the autonomous mode can be disabled, then 1.) You will still need a drivers license to own an autonomous car, so no increase in convenience and no benefit to the disabled; 2.) The implication is that as the "driver," you must be alert to the possibility of emergency situations at all times, even in autonomous mode. This means you will have to pay attention as if you were actually operating the vehicle, which negates a lot of the value of a self-driving car. What's more, various cognitive processes will probably cause people to think they're in an emergency when they're not, causing people to turn off autonomous mode way more often than necessary, making the road much more unpredictable and (ironically) unsafe.
So will autonomous cars be a thing? Almost certainly. In fact, it seems they already exist. Will private ownership of autonomous cars by US consumers ever be a thing? Don't bet on it.
"Fine," you say. "Autonomous cars will be like fleets of robot taxis that you hire." But if most of the drivers on the road are still driving their own cars, then that negates a lot of the safety and environmental claims. Autonomous cars won't be able to optimize coordinated driving for fuel efficiency, for example, and all the marketing and all the newspaper headlines will be around how well they cope with unpredictable human driver behavior.
And if it goes the other way and you start seeing autonomous cars bumper-to-bumper like taxis in NYC, how long will it be before someone asks whether these robot taxi companies are paying their share of the taxes used to pave the roads, install traffic lights, etc.? And then there's still the issue of who's liable if a blind guy gets in an accident in a robot taxi. Or if blind guys aren't allowed to hire robot taxis, who goes to court over the Americans With Disabilities Act?
Don't worry, though. Once Google evolves into a full-blown defense contractor, it will still be able to sell autonomous vehicles to the Pentagon.
Breakfast served all day!
The insurance racket can't be destroyed soon enough. The amount that our government at all levels does to protect every segment of the insurance industry - auto, health, life, etc - is terrible. This industry can't die soon enough. Any other industry attempting to drive Ponzi schemes such as theirs would have been taken out long ago, but these guys have better lobbyists.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
We do not want that loophole to be there. As.
ERROR ERROR autonomous mode is ending in 3..2..1...crash.
Has a nice ring to it.
maximum overdrive just wait for them to enter kill all humans mode.
There's more to ensure then just driver liability. Vandalism is also a major reason to insure your car. And most of the premium in car insurances goes to cover the risk and guestimated possible future repair costs. If risk goes down the premium goes down. Simple as that. Same with houses, you pay a lot more premium if you have a thatched roof instead of something less flammable. There are already experiments with driver data influencing premium. i.e. you drive slower you get lower premium.
Ironically, if you're only driving a semi-autonomous car, "you could end up in court fighting to prove the car did wrong, not you,"
Good luck proving it was the car when the manufacturer turns over 100m datapoints showing exactly what happened in every system for every 1ms for the past month.
"I swear I didn't touch the wheel" will go the way of "my dog ate my homework"
Google has the right to charge whatever they want for the vehicles and it is up to the consumer to determine if they are worth it on the market. Google can put part of that money towards the liability if they like. As a consumer, I only feel I should pay for the risk of the vehicle having to be replaced should it get damaged, no different then house insurance.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
If you have a self driving car you can bet there will 360 video of the entire incident to go through with exact speed logs. You will also be able to review the decision tree of the self-driving car.
Wait for inevitable addition of all cars automatically reporting driving "deviances" to the authorities, or at least the insurance company consortium, with full data logs.
Before we reach the point where all the road traffic is self-driving vehicles, there will be an extended era of mixed use. During this period, automated cars will drive extra-cautiously, like the ones now in beta. It will be like having a few million more old people on the road. Manual drivers who are not that good will tend to get into more accidents as they impatiently fume behind slow auto-drive vehicles. Their insurance rates will spike. We are also likely to see self-drive adoption go much faster in cities than in rural areas, with car-buff holdouts actually moving to the countryside to get in a few last years of being drivers. We might even see whole states like Georgia and Tennessee advertising as "you-drive country" to attract the sports car demographic during this period.
But after a generation, manual driving will become obsolete. DMV offices will close, and driver insurance will no longer be sold. Road speeds will steadily increase to 200 mph on desert interstates, with city traffic interpenetrating at 50 mph through intersections that once had signals. At that point, all vehicle insurance will be carried by fleet operators.
Think of how much better the economy would be if everyone had $200-$1000 a year extra to spend on something besides car accidents. Bad for insurers of course, but they can go on to do something more productive with their lives.
"First they came for the slanderers and i said nothing."
Why would self-driving cars destroy the insurance industry?
Even if we ignore the ability of incumbents to fight bitter rearguard actions for years or decades when their economic interests are threatened; it's not as though self-driving actually changes the basic risks associated with cars. In an ideal world, automated cars may be more reliable than human drivers, certainly less likely to be drunk or exhausted; but unless they somehow achieve infallibility, there will still be periodic accidents. And the whole point of car insurance(and the fact that it is generally mandatory) is that a car accident can easily cause more damage than most operators can afford to pay for, especially if injuries or deaths stack up in addition to mechanical damage.
Nothing about the self-driving-ness changes any of this. It might change the determination of who is at fault; or increase the number of 'no culpability can be assigned' situations; but it will still be a situation of occasional ruinously expensive incidents with long periods of quiet, which is more or less exactly what insurance is constructed to cover.
There will, presumably, be lots of fun arguing over who exactly carries the insurance, and what sorts of failure modes become the vendor's problem vs. the 'known risks' that the operator takes in using an automated vehicle on the road; but the same basic factors are in play.
What will probably change is the flavor of actuarial data-mining that is popular: currently, it's all about scrutinizing the driver for direct and indirect signs of riskiness. If the driver isn't driving, they'll presumably shift to exhaustive scrutiny of system maintenance and where/when the vehicle is operated(since some roads and times of day will just be more risky than others). Insurers mapping out 'high-risk' zones and charging people who travel in them more definitely won't go badly or upset anyone. Not at all.
It'll destroy arrogant tech companies
My house doesn't drive at all, but I still need insurance, because things can still happen to it.
Anything that is expensive, that you can't afford to replace should something happen to it, will need to be insured. This notion that self-driving cars will destroy the insurance industry is just plain silly.
What happens when 5 people stop off the sidewalk together and the only way to avoid that group of 5 is to run down another person who is on the sidewalk?
The issue with this problem is that the manufacturer is going to have to consider and program the car for this type of problem. In other words, a decision will have to be mostly made in advance.
The real "Libtards" are the Libertarians!
If you get into a car that has no controls that a human can use to directly control the speed and direction of the vehicle, then you are insane. I'd rather walk everywhere the rest of my life rather than get into some deathtrap like that.
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
Auto insurance isn't the only industry under threat.
With reduced accidents, body shops and mechanics, paint shops, towing services, even traffic reporters will have less work and there will be job losses. Automated cars are liable to break down less due to diagnostics so fix-it mechanics will have less work than they already do, and dealers will see reduced traffic in their repair bays, and what work there is will resist having stuff added to repair bills because the automated cars will know what is wrong.
Automated cars are going to need far fewer roadside breaks and an automated car won't feel the impulse to stop for snacks or fast food or smokes, so swaths of businesses that depend on passing traffic to see the business and pull in will suffer huge reductions in sales. Your car won't care if you pass a hamburger shop, and by the time you see it and perhaps want to stop, you won't have time to tell the car to stop.
Gas stations will probably also suffer greatly as cars will probably have some way of optimizing where and when they need to refuel. Automated gas pumps have been in the works for a couple decades and had been developed to the point where it was a finished machine but it was expensive and, well, most people pump their own gas for free so why pay for a robot to do it? But perhaps that will change now that an automated car might automatically drive itself to get fuel from an automated gas pump.
Sig for hire.
Pretty much this.
if you never use it. If your someone who does then, well, it's not so cheap. I've had my car totaled by another driver twice and both times got about half market value. The folks I know who get in accidents frequently pay $3000/yr. Meanwhile I've been paying $600 year since my 20s and never once got in a wreck. The folks paying the $3k/yr lose out because it's expensive has hell to drive. I lose out because I'm out $600/yr for nothing for 20 years of safe driving and would have come out ahead both times vs what they paid out.
The only ones winning here are insurance companies. They win both times since they get to sell us health insurance to boot (yeah, different companies, same people on the Board of Directors).
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you're not legally required to purchase liability insurance to own and operate a home...
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"There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson."
Somebody better tell the good professor the owner would be the first on hook.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
DMCA does not the fbi or other courts from getting the info they need.
As long as they require an attentive driver and a license process, there will be an insurance program at the ready
Twinstiq, game news
It takes only a pencil and napkin to see the industry would shrink. In a semi efficient marketplace (there are a large number of competing firms), the percentage of premiums paid as claims must be greater than 50%. (my google fu fails me but it has to be at least that high)
If autonomous cars have accidents at 1/10 the current rate, and eventually 90% of cars on the road are autonomous, accidents committed would fall to 20% of the current levels (in this example, the 10% of jerks still driving manually are causing as many accidents as the other 90% of vehicles - hopefully cause for legislative action to make this illegal). If the percentage paid as claims stays the same, the money flowing in to the auto insurance industry falls by a factor of 5.
Also, in this example, people who drive manually will have insurance rates TEN TIMES what people who drive autonomously pay. Also, since every car will effectively be recording telemetry that is video from multiple cameras, and all kinds of other data, nearly every accident will be "witnessed" by autonomous vehicles as witnesses. (either one of the cars in the collision will be autonomous and they recover the data recorder from the wreckage or look at feeds from other cars driving by)
So it will be very clear who the fault is. Someone else posted that at fault insurance would be common - no. It will be abundantly clear with almost every wreck that does happen who did it.
Let's start by saying that currently 12 states and Puerto Rico have no-fault auto insurance laws, and the car insurance business thrives there. Why? Because fault is really not the core important part of insurance. Insurance is there to cover the risk you cannot afford to pay for all at once if you have a problem. Regardless of who is at fault, if you're driving around in a 40,000 dollar car that the bank holds a 30,000 dollar note on, the bank is going to insist you carry insurance on the car.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
There is no way in hell that companies will allow themselves to be held liable and the insurance industry is not going to give up the goose that laid the golden egg (i.e. automobile insurance). Owner's will still be required to have insurance and will be held accountable for anything their self driving car does.
Since auto insurance is mandatory, the insurance companies will only get richer, at least for a while. There will still be a need for auto insurance since accidents will still happen, possibly not car-on-car accidents so much, but things go wrong and it would be beneficial to have insurance to pay for the damage and cover any lawsuits.
Blu-ray AACS was hacked years ago, mainly because the player keys kept leaking. However the truth is it doesn't really matter because streaming services made non-commercial piracy pretty much irrelevant economically (at least in the markets they care about). It's easier to pay Netflix or Amazon a lil fee and watch it straight on your TV than to pirate.
Who else thought this was about something written by Will Self?
With few self-drivers, won't insurance premiums for self-driving become so high that it will be unaffordable for the masses?
Since auto insurance is mandatory,
Certainly, but what happens when you hand over the insurance certificate issued by the manufacturer of the car when the police(or whoever) asks for it? This already happens over in Europe - select companies cover the first 3 years of insurance, liability included, for certain models of car. It can be a real cost saver for new drivers.
There may be some regulations and paperwork to handle, but let's not pretend that Ford, GM, and such couldn't incorporate insurance companies under them.
I don't read AC A human right
If a self-driving car deliberately runs over somebody then stick it in a big parking lot for 25 years!
Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
Tires can blow, parts can break down unexpectedly. If you live in Quebec, Canada then your vehicle might fall into a giant pothole. There's also incline weather, animals, falling trees, power poles, etc etc etc.
Basically, you're ruling out the driver, but ending up in a situation similar to home insurance covering sudden disasters to your property, or lawsuits from others injured on your property regardless of whether you were an active participant (i.e. in the above situations).
Insurance is still needed, if for no other reason than that cars are so expensive. The risk would be considerably lower, so the premiums could be a fraction of what they are now and the insurance companies could still be quite profitable,
Autonomous vehicles won't destroy the insurance company. Insurance assigns a dollar value to the risk involved. Assuming that autonomous vehicles are lower risk, then there will be lower premiums, but also lower payouts. So, yes, gross revenue will go down, but not necessarily net profit. And it is net profit which is the goal for shareholders.
Will Self-Driving Cars Destroy the Auto Insurance Industry?
No, it won't. It will change it, though.
Liability is funky dance between ownership and what an attorney can convince a jury/judge.
I know plenty of people who don't own cars, yet have drivers insurance. The reality is in our litigious society, everyone is going to get sued in an accident. You're still going to need insurance to protect your assets and future income.
A huge number of lawyers will be out of work. Our judicial system will reduce the cases clogging our courts.
More importantly, a whole SWATH of small, corrupt towns across the nation will lose the majority of their funding and be forced to actually charge their townsmen taxes instead of depending on speed tracks.
excitingthingstodo.blogspot.com
Every time this comes up, I expect someone to point out the obvious, existing example of how this would work: Airplanes. All airplane crashes are investigated, and airplane manufacturers can be held responsible for defects in their planes almost in perpetuity. Obviously, this means that they have all gone bankrupt, right?
Yes, airplanes are more expensive because of this (and a lot of other reasons), but they are also safer. If car companies are responsible for their mistakes, it might actually make things better.
Long live the Speaker Bracelet
Rolo D. Monkey
IMHO, self-driving functionality will likely only appear in all-electric vehicles on the grounds that the technology desperately needs a killer app to entice buyers. Lack of impressive styling, lack of range, lack of extended range within 5-minutes, lack of infrastructure to charge them, minimal load-carrying capacity, added expense of having to replace batteries every few years, high upfront costs all serve to bork the concept of all-electric vehicles beyond those commuting to and from work in major cities. Even then, more people are likely to buy a gas-powered vehicle. So, my guess is that self-driving ability won't be offered in gas-powered vehicles for no other reason than to act as a sort of subsidy to the electric vehicle industry.
The insurance industry will simply reuse the precedent of ObamaCare. They will once again get laws passed requiring the purchase of their product. How can any of you be so stupid as to not see that?
Peace is easy to achieve, just surrender. Liberty is much harder get/keep.
Will any other as-of-yet unproven and theoretical technology make current technology obsolete? Let us pontificate.
Its going to have a bigger effect on local government financing than anything else. In theory there will be a huge drop in red light / speeding / parking tickets that will smack the municipal bottom line pretty hard. That's why I'm not so gung ho about the prospects of automated cars. In order to make up for the loss of revenue municipalities will regulate the shit out of the industry, most likely treating it like a utility (for our own good, of course), and limiting the competition so that they have to buy (expensive) licenses from the city. It'll be Taxi Medallions Part 2.
Here in Quebec, we have a "No fault" insurance law. When an automobile accident occurs, each party takes care of it's own repairs, and the deductible is accessed against the faulty party (or absorbed by the company).
Our insurance rates are probably the lowest in North America. The NFI plan also accommodates the injured. Hospitalization is part of our healthcare system, if the accident requires hospitalization of either or both parties, passengers and bystanders.
Financial compensation (lawsuits) don't really exist.
Leslie Satenstein Montreal Quebec Canada
The original article talked about "disrupting" not "destroying" - very dishonest OP, FOR SHAME!!!
Hotels:
Why drive during the day, just lean seat back and wake up at your destination.
Transportation:
Truck drivers, bus drivers, taxi drivers: Do you want fries with that?
Municipalities:
They make a lot of money off of speeding and parking tickets. No more $ for you!
States:
Fees off of licensing drivers. Our grandkids won't bother with any sort of vehicle certification.
We'll survive all these changes, but lots of changes and adaptations headed our way.
if the cars aren't online. Just set them up with manual updates and then hacking the car will be pretty much the same risk as someone breaking into your car or cutting your brake lines.
Destroyed? Absolutely not. Since most states require insurance, there's no to believe that insurance wouldn't exist on self-driving cars. Even if it's not required, it's foolish not to carry insurance on something that expensive relative to the average income. More importantly, insurance companies lose money with accidents. The fewer the accidents, the higher their profit. And as self-driving cars become more reliable (as one would expect), the rates would trend lower, as with any good driver. In the event that the car manufacturer is responsible for an accident, the insurance company will simply pursue them for damages, just like they do now.
Likewise, the rates for human-driven cars will trend higher as the pool of human-driven cars decreases and there are fewer drivers among which to spread the risk. And that risk will go up, since the drivers that cling to human-driven cars will, by definition, be bigger risk-takers, since the most responsible thing to do is to abdicate control to a more reliable actor. Those who can't afford self-driving cars will eventually be the same people who already have higher rates -- those with bad credit.
That's not to say that some industries won't be hard-hit by self-driving cars. The state and local traffic-ticket industry will be devastated. DWI lawyers will become a niche market, and for-profits jails will have fewer inmates, both from DWIs, and the byproducts of vehicle searches during traffic stops. The wrecker industry will be decimated. Emergency rooms will see a significant downtick in customers. Taxi, limousine, and commercial drivers will become obsolete, although the industries themselves may actually grow.
https://www.eff.org/https-everywhere
Insurance companies will be a major contributing factor in robot cars going mainstream, like they have been over and over throughout history with medical advancements that doctors and hospitals are slow to adopt. AND most certainly, just like insurance companies already do, you will get claims denied rightly and wrongly. But, New! SHINEY! TOTALY UNLIKE ANYTHING EVER BEFORE!! BELIEVE THE HYPE!!!
Your assumption is that insurance companies will need to maintain the same level of staffing.
They won't.
When cars crash they'll both immediately go into negotiations as to relevant fault of the parties and the money will automatically be deducted from your bank account.
Seriously, we're a long way away from having these things being ubiquitous enough to impact insurance etc. They're still very much in quirks mode; there is real reason to question the ability of the neural nets to negotiate the reality of an environment filled with unpredictable weather, things and people ...completely novel multi-factor physical situations, including the fact that these cars will accelerate, brake, stop and steer on computers hardsware and software which are both vastly more hackable and complex than those that control those systems today.
The belief is that between the computer simulation and modeling, the datamining of extant accident reports, the hours of test driving and the ability for Google engineers to imagine as many weird situations as possible, they'll be able to train the neural nets to perform in a way that doesn't regularly veer into insanity-behid-the-wheel.
Since neural nets admit of no analytic proof techniques that we know of- no one can look at a trained state of a NN - the nodes, their configuration and the weights between them- and and say what it does or why- there's no proof for any given circumstance that it will act in a reaosnable manner even if it's done so the last 10,000 under circumstances which were very similar from a human's perspective.
No one knows what the world looks like to a NN if you include the all important "what should I DO" in the definition of "looks like", as your should.
Then there's the issue with acceptance by humans who and their sly, lying ways whenever culpability or loss rears its ugly head.
We're a long way from this. A long way.
What makes you think you need home owners insurance? You don't! ...unless, that is, you do not own your home and it's the bank that is requiring you hold insurance.
Another example - I have tenants. They do not pay home insurance. They purchase a housing service from me. The bank is a lien holder on that property, so, they require I keep it insured. I could probably drop the insurance if I owned the property outright. OTOH, being a landlord does incur additional liability, so, I should probably keep my umbrella policy.
With self-driving cars, I do not plan to own one. I will rent the transportation service as needed and let someone else pay to insure it. Think Uber without the drivers.
A house only makes good financial sense if the value appreciates at a rate = or GT inflation. Cars depreciate quickly. It is very expensive to own one. You are going to see MUCH better value paying for transportation service on an ad-hoc basis because those rented vehicles will be well utilized rather than spending most of the time in your parking lot or garage depreciating.
Classic example of making something that's fool proof. It's still only idiot resistant. You'll have dumbasses that will insist on driving even in terrible weather. Hey, I want to get to work, there's 3-8" of snow outside. I should be able to make it. Something happens, it skids out of control, down an embankment, takes out a bus full of lawyers (they all died of course, hey this is my scenario). Now what.
All of what you said is true, but it's also beside the point. The point is that we buy insurance to mitigate the risk of a major loss of something valuable that we own. Because my house is paid in full, I may not be required to have insurance, but I'd be stupid not to have it, unless I had enough cash to absorb a catastrophic loss on my own (which I don't).
Even if you never own a self-driving car, but simply use a service, that self-driving car still has an owner, and that owner is still as likely to need insurance for that car. This is no different from today's rental car agencies. They can choose to buy insurance for their fleets, or they can choose to self-fund their own insurance. Either way, someone is prepared to absorb the loss, should a loss occur.
My basic point is that moving from human drivers to computer drivers doesn't change the basic need for insuring against the loss of valuable property.
Of course they will, for the first 10 to 20 years of adoption. By the time I'd consider getting one, these problems will have been sorted out. No doubt some people will die in the process, but that's their contribution to making the future safe for other people.
Birds are not dinosaur descendants;birds are dinosaurs, for all useful meanings of "birds", "are" and "dinosaurs"