Insuring an autonomous vehicle is complex, but it’s certainly not impossible. Although Level 5 cars won’t be on the road for years, the majority of vehicles will eventually be autonomous. As such, insurers will have to address many variables in an insurance policy. As such, there is likely to be extensive litigation over insurance coverage issues arising from autonomous vehicles. Fortunately, many companies are already looking into the issues.
First, the industry will need to evaluate the risks of autonomous vehicles. Insurers will need to develop new ways to evaluate AV risks. They will need to develop frameworks that will help them evaluate risk and establish new insurance products. The industry will need a lot of information about the risks posed by AVs. However, as the technology develops, insurers and manufacturers should collaborate on a framework that will facilitate the sharing of AV data.
As the software in autonomous vehicles becomes more sophisticated, insurers will have to adjust their policies to account for the new risk. This could result in lower insurance premiums. Moreover, accidents could be less frequent as there is no driver to make mistakes or run red lights. In the long run, autonomous vehicles could eliminate up to 90% of auto accidents in the U.S., which would save $190 billion in medical and property costs.
Despite the potential for lower insurance premiums, experts believe that the adoption of driverless cars will result in increased safety. As a result, insurers will have to adjust their business models to ensure they can profit from the new technology. The industry will also need to develop policies that will benefit consumers and car manufacturers, as well as their own businesses. For this reason, the time is now to prepare and adopt new policies for the emerging technology.
The Travelers Institute has also published a position paper that assesses how the current auto insurance structure can be leveraged to accommodate the evolving needs of autonomous vehicles. The document affirms the importance of the auto insurance industry in adapting society to new transportation innovations. The authors conclude with recommendations for how the industry can best respond to this emerging technology. The Travelers Institute will continue to provide its clients with additional information on the industry’s latest research on autonomous vehicles and its future.