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Auto Insurance in a Self-Driving world

Auto insurers are unprepared for the changes self-driving vehicles will create for their business.

84% insurance companies don’t think driverless vehicles will have a significant impact on their business until 2025, but they might be surprised because:

Google is testing a fleet of 100 autonomous cars around its northern California headquarters. Audi and Delphi Automotive have teamed up on a self-driving car that completed a cross-country trip earlier this year. Tesla Motors is rolling out a software update that will enable its Model S to drive autonomously from San Francisco to Seattle.

Cadillac is planning to introduce an advanced system it calls Super Cruise on a 2017 model that will take over steering, accelerating and braking in highway driving. Toyota plans to offer crash-avoidance technology in all Toyota and Lexus models by 2017.

Autonomous vehicles will change the automotive business and this change will happen faster than most in the insurance industry think.

To remain relevant in the future, insurers must evaluate their exposure and make necessary adjustments to their business models, corporate strategy and operations.

The question in place should be if you relinquish control over what your car is doing, why should you pay for any misdemeanor?

The brief answer to my question and what makes sense is if getting rid of the driver could remove the need for private insurance, as all the liability in case of an accident would be transferred to the car’s manufacturer or the software creators.

Intelligent cars, with the assistance of 360-degree cameras, could provide much more information: from whether a safe braking distance was observed and the laws of the road were followed to how smoothly turns were handled.

In other words, they could help estimate the ‘percentage’ of driver’s fault in case of an accident and distribute the liability between the man and the machine.

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