Do Self-Driving Cars Spell Doom for Auto Insurers

Self driving cars are available without the steering wheel to control. Though it has the advantage of trouble free parallel parking as it can drive of its own, yet the removal of human drivers create havoc for auto insurers. According to a survey done on road accidents it has been found that 90% of road accidents have been occurred due to the error of the driver. Self-driving cars eliminate those driver mistakes which mar the business of the insurance companies directly. Self driving cars opposite to the human drivers always remain cognizant of hazardous road conditions. These cars can see 360 degrees around the car at all times. Therefore, in such car, chances of getting distracted become less. As this self driving car runs automatically and succeed in reducing the risk of crash or accidents, therefore, people rarely think of opting for auto insurance. With manually automated cars needs of insurance is prominent. However, with self driving cars emphasis will be given on make and model of a car instead of a driver’s accident history and how often he drives. As the chances of accidents curtail, chances of getting premium also lessens. Self driving cars lead to less traffic, which helps in lowering crash and accidents. This aids in reduction of premiums. Self driving cars cut the rate of death, injuries and property damage that save 30,000 lives per year in the United States. As these cars run on software, car insurers are doing research on any new risks that are likely to emerge. These driverless cars compel the auto insurers to think for producing new insurance products, like protection from hackers. These cars are hard to be stolen as the GPS system on which the car is rely on for navigation will probably have a tracking device. In case the car is stolen, it can easily be disabled until recovered. This makes these self driving cars less attractive target for thieves. Again this encourages people to deny insurance coverage on the car. However, with the emergence of self driving car, risk of damages, accidents lowers, and cases of car theft minimizes, which directly diminishes the requirement of auto insurance. The technological advancement has brought much more innovation in auto industry by assuring the future of self driving car on the roads. This spells a certain doom on the auto insurer’s mind. These robotic self driving cars brought nightmare that haunts every auto insurance company. The fear goes like this: perfect robotic driver leads to drastically reduced amount of car crash. This will compel auto insurers to reduce their premiums that cause reduced revenues.  The safety and other benefits force auto insurers to lower the coverage as well.