The Influence Self-Driving Cars Will Have on Car Insurance

Thursday, December 27, 2018

Self-driving vehicles,also called driver-less or autonomous cars, used to be concepts that seemed more fitting for a sci-fi book or a futuristic movie. With each passing year, more and more vehicles have features like crash avoidance and collision warnings. Since most accidents are caused by human error, driver-less cars could theoretically have the potential to lower the number of vehicle accidents.

However, numerous factors ensure this is a gradual shift. While it’s not an overnight change in the vehicle industry, it is visible on the horizon. Drivers and insurers must consider the impacts this innovation has on auto insurance. The following explains some of the things to keep in mind.

 

Automation Levels of Self-Driving Cars

The thought of being chauffeured around by, well, no one, may seem exciting to some people. But to others, very real concerns come up. The concerns are valid when it comes to insurance considerations since the driver usually bears so much responsibility. Yet,the innovative machines grouped into a driver-less/self-driving category actually have different levels of automated features and aren’t necessarily completely driver-less. It’s important to understand these various levels to realize the current influence and the potential influence on auto insurance. The U.S Department of Transportation has adopted the following automation level system, which was created by the Society of Automotive Engineers International (SAEI).

 

0 – No Driving Automation: No driving automation anywhere

1 – Driving Assistance: Adaptive cruise control OR lane centering as the driver supervises

2 – Partial Driving Automation: Adaptive cruise control AND lane
Centering as the driver supervises

3 – Automated Driving (Conditional): Automated driving in dense freeway traffic at low speeds

4 – Automated Driving (High): Automated driving within a city’s center (boundaries established in coordination with GPS)

5 – Automated Driving (Full): Automated driving everywhere

While warning systems for front-end collisions have been around since 2000, the Highway Loss Data Institute predicts that most vehicles will have the feature by 2049. The Insurance Institute for Highway Safety states that 4.5 million vehicles with self-driving features (not fully automated) will be in use by the year 2030.

 

Shifts in Liability

If vehicles are controlled more by computerized systems developed by their manufacturers, and less by the actual drivers, the notions of driver liability and responsibility will inevitably evolve. The conversations about liability became serious in 2016, with the first fatality from a driver-less car accident. The manufacturer, Tesla, reported that the car’s sensors didn’t detect a large truck turning into the vehicle’s path in bright daylight.

 

Ultimately the National Highway Traffic Safety Administration determined the Tesla’s system didn’t have safeguards in place to compensate for such scenarios. At this point, the final evolution of liability remains to be determined as the technology’s shortcomings are worked through. If the vehicle is owned by a business,then there may be a different set of concerns. 

 

Regulatory Matters

With self-driving cars presenting numerous changes in operation, and manufacturing, there are significant opportunities for new legislation at the federal and state levels. Lawmakers began enacting some laws for this niche several years ago, but more can be expected. For example:

  • Federal Laws

At the federal level, the U.S. Department of Transportation (USDOT) encourages manufacturers of vehicles with automated features to submit assessments to the USDOT, but it is a completely voluntary process.

  • State Laws

More than half of all states in the U.S. have legislation regarding self-driving vehicles, although the content and purpose of the laws can vary greatly from state to state. Nevada was the first state to allow their use. As of 2018, at least ten states do not have any legislation for autonomous cars.

 

Ownership Trends

As populations have increased within large metropolitan areas, automobile ownership has actually declined in many of those same areas. People are still using cars to get around, but there is an increasing number doing so through rideshare services, carpooling, and transportation apps.

In reality, a vehicle owned by an average individual simply sits and does nothing for the vehicle owner most of the time it is owned. Vehicles utilized in transportation services, or other businesses requiring driving, are used for more hours throughout the day. A fully automated vehicle(i.e.:truly driver-less at Automation Level 5) could be ideal for in those situations, as companies like Uber and Lyft have been testing.

 

Final Thoughts

The coverage options and liability issues for cars controlled by computer systems instead of people may look different in the future than they do today, but auto insurance will still be needed. And if the self-driving vehicles are being used by a business, even just to deliver pizza, they would still need commercial auto insurance.

 

To learn more about the influence self-driving cars will have on car insurance, contact the professionals with ProtectiveAgency.com at (877) 739-9367. Our licensed insurance experts will be happy to answer any questions you have.