Could driverless automobiles lead to a vehicle insurance coverage crash?

2017 has been signposted as the year when driverless vehicles will when and for all step out of the world of science fiction and hit the genuine world streets – a significant technological leap that will not only have enormous implications for the motor business and every single of our everyday lives, but will also raise a large query mark more than the future of the vehicle insurance industry.

If we’re all being ferried about in autonomous motors, insurers won’t be in a position to base premium rates on a driver’s age or encounter merely because there will be no driver.

And if accident rates fall because driverless vehicles get rid of human error, will the bottom fall out of the motor insurance market?

Driving on auto-pilot

The idea of the driverless auto initial started to really intrigue motorists back in the sci-fi obsessed 1950s when features like auto-pilot and sonic keys were first put to the test – attributes which right now go by the name of cruise manage and remote locking, respectively.

Just more than half a century later and not only has Google’s fleet of automated Lexus SUVs clocked up in excess of 700,000 accident free of charge miles amongst them, Nissan has been testing self-driving cars on Japan’s highways because they had been made street-legal final year.

Right here in the UK, meanwhile, driverless pods are being place via their paces and are expected to be a function on the roads of Milton Keynes inside the next couple of years.

But how is this move to driverless automobiles probably to influence upon the insurance industry?

No claims? No car insurance coverage?

Nearly 3-quarters (74%) of the UK’s 26.4 million households at present has some sort of automobile insurance coverage policy, which means the motor insurance market is  worth an estimated £13.8 billion and makes up just more than a third (34%) of the UK insurance industry as a entire.

The car insurance sector is also a single that is driven by claims, and so if anti-collision technologies reduces not only the number but also the severity of insurance coverage claims, the reduction in payouts will naturally lead to this sector to shrink.

But it won’t disappear fully as there will still be the exact same need for cover against theft or vandalism and the locations in which we reside, exactly where the auto is kept and the number of miles we travel, will nevertheless all be valid criteria on which to base premium prices.

And far from disappearing altogether, motor insurance coverage is anticipated to evolve so it works a lot more like home insurance, which offers in fewer claims but has a considerably higher expense per claim.

The rise of the cyber-vehicle crook?

Driverless vehicles need to also function to clamp down on insurance fraud – every single auto will have a extremely sophisticated on-board personal computer which will eradicate any disputes more than who is at fault in an accident and ought to also place an finish to crash-for-money scams

On the flip side, we could see a rise in ‘cyber car crime’, whereby on-board computers are hacked and automobiles taken over – this was effectively done by 2 security engineers who  were able to ‘drive’ an SUV employing nothing at all more than a games console controller – or sensors are manipulated to display excellent driving qualities when the reverse is accurate, for instance, the on board pc displaying the car is sticking to the speed limit when in actual truth it’s performing 100mph down the motorway.

These are all concerns for an additional day. although- albeit 1 that doesn’t appear as well far away.

Could driverless automobiles lead to a vehicle insurance coverage crash?