- 13 Aug
Will Auto Insurance Become Obsolete?
Will the need for auto insurance companies disappear as driverless cars increase?
The number one reason for car accidents is human error. Remove the driver from the equation and you remove the need for auto insurance. Thanks to autonomous vehicles the roads might become a safer place to drive. A great example is Google’s Self-Driving Car.
This is good news for drivers, but bad news for auto insurance companies. In fact, it is projected that over the next ten years the number of auto insurance companies will drastically decrease. Self-driving vehicles are shaping the path to the future of insurance companies. To remain relevant, insurance companies are adjusting their business model. They realize the need to support the semi-autonomous vehicles. Among other things, they need to figure out the right safety questions to ask. Or, how to price their insurance premiums for autos.
The main question to answer is: “Can autonomous vehicles improve the safety of drivers and end the need for insurance?” The answer may surprise you.
To answer this question, Neville Stanton completed a long-term study. After 20 years of prolonged research he concluded that with increased automation a vehicle is more likely to be unsafe. His research concluded that in comparison to a manual vehicle it takes a person five times longer to react to an emergency in an automated vehicle.
Semi-automated vehicles are safer because the driver is still engaged in the driving process. This is due to feature including collision and blind-spot monitoring. The big takeaway is that with automated and manual vehicles there will always be a need for liability or auto insurance. As you might need less coverage, insurance companies will find other ways to remain relevant.
Next time someone asks if you want to drive an automatic vehicle in the future or stick with a manual vehicle think carefully about your answer.
Will you be making the switch to a self-driving vehicle if it means lowering your auto insurance? Keep up with the John Bales Attorneys Blog to learn more about auto insurance.