How will self-driving insurance work?

There is no shortage of debate when it comes to the summit of self-driving cars. Studies have shown that the majority of Americans are still not comfortable with driving fully autonomous vehicles on public roads. However, as technology continues to evolve and become more widespread, many interesting questions arise. One of the most confusing questions is how standalone auto insurance will work. After all, isn’t “the car driving itself” a perfect excuse for a car accident?

Self-driving cars could reduce car accidents by more than 95%, so car insurance premiums are expected to drop drastically

Argo AI Ford Escape | AI Argo

Innovation & Tech Today recently published an article delving into proposed auto insurance details as it relates to self-driving vehicles. Fully autonomous cars are still years away. However, figuring out how the insurance will work is definitely something that should be handled in advance.

The NHTSA states that 94-96% of accidents on the roads today are caused by human error. So, in theory, eliminating the possibility of human error could lead to a reduction in car accidents by an equivalent amount. However, even assuming this perfect scenario, there is still a 4-6% chance of an accident occurring. So what?

I&T states that car crashes of fully self-driving cars are likely to be the responsibility of the vehicle manufacturer. After all, if the car accident occurs entirely without human intervention and is solely responsible for a defect or error in the software or hardware of the car, it does not make sense that the owner of the car pays the bills. So unless automakers can prove that the vehicle owner is at fault, they will be liable.

However, if human interaction causes a fully self-driving car to crash, I&T Today says insurance companies will start offering self-driving car insurance policies. Yes, that sounds a little strange. However, it makes sense if you consider that you are buying a car insurance policy as a precautionary “just in case”. However, the article also states that since car accidents will be much less likely and relatively rare, the price of self-driving car insurance should, in theory, be much lower.

Could self-driving cars kill the insurance industry?

A fully autonomous Argo AI taxi and Ford Escape delivery on public roads in Austin, Texas

Argo AI driverless Ford Escape | AI Argo

As with everything in the world, time eventually makes some things useless. A future where every car is self-driving is probably a multitude of decades away. However, there may come a time when car insurance rates and the number of policies drop so low that insurance companies may cease to exist.

Of course, many car insurance companies also insure owners, renters, watercraft, etc. So if you’re worried about multi-millionaire CEOs getting cold at night, that’s probably not much of an issue.

Overall, the concept seems a little strange. However, the thought of looking at a car insurance policy comparison and seeing self-driving policies can be a very real thing in the future. For now, however, that’s a pretty distant reality.

RELATED: Argo AI Self-Driving Cars Are Now in Austin and Miami


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Justin D. O'Neill