Could driverless vehicles trigger a car insurance coverage crash?

2017 has been signposted as the year when driverless cars will after and for all step out of the world of science fiction and hit the real planet streets – a significant technological leap that will not only have huge implications for the motor sector and each and every of our everyday lives, but will also raise a enormous query mark more than the future of the car insurance market.

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

And if accident rates fall simply because driverless cars eradicate human error, will the bottom fall out of the motor insurance market?

Driving on auto-pilot

The concept of the driverless car very first started to genuinely intrigue motorists back in the sci-fi obsessed 1950s when characteristics like auto-pilot and sonic keys had been 1st place to the test – features which nowadays go by the name of cruise manage and remote locking, respectively.

Just over 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 in between them, Nissan has been testing self-driving vehicles on Japan’s highways considering that they were produced street-legal final year.

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

But how is this move to driverless automobiles most likely to impact upon the insurance coverage sector?

No claims? No automobile insurance?

Virtually 3-quarters (74%) of the UK’s 26.4 million households at present has some sort of automobile insurance coverage policy, meaning the motor insurance sector is  worth an estimated £13.8 billion and makes up just over a third (34%) of the UK insurance coverage sector as a whole.

The vehicle insurance market is also one that is driven by claims, and so if anti-collision technology reduces not only the number but also the severity of insurance coverage claims, the reduction in payouts will naturally cause this sector to shrink.

But it will not disappear completely as there will still be the very same need for cover against theft or vandalism and the areas in which we reside, exactly where the vehicle is kept and the quantity of miles we travel, will nonetheless all be valid criteria on which to base premium prices.

And far from disappearing altogether, motor insurance is anticipated to evolve so it performs a lot more like house insurance, which deals in fewer claims but has a much higher cost per claim.

The rise of the cyber-automobile crook?

Driverless cars must also operate to clamp down on insurance coverage fraud – each and every automobile will have a extremely sophisticated on-board personal computer which will eradicate any disputes over who is at fault in an accident and need to also place an end to crash-for-cash scams

On the flip side, we could see a rise in ‘cyber auto crime’, whereby on-board computer systems are hacked and vehicles taken over – this was effectively completed by 2 safety engineers who  were able to ‘drive’ an SUV employing practically nothing much more than a games console controller – or sensors are manipulated to show ideal driving qualities when the reverse is accurate, for instance, the on board laptop displaying the car is sticking to the speed limit when in actual reality it is carrying out 100mph down the motorway.

These are all issues for another day. although- albeit a single that does not look also far away.

Could driverless vehicles trigger a car insurance coverage crash?