What happens to a car insurance agency when people are no longer actively behind the wheel? Auto Piloted and “self-aware” cars mean fewer accidents, and that means a diminishing demand for automobile insurance, at least in its current form. (Read this article for more information on the types of insurance you need and those you don’t.) Executives of the largest agencies have already sent official worries in annual financial reports about losing profits over the next decade due to the revolutionary change in transportation. Without active drivers, cars will run more like trains on a predetermined track, like computers on wheels.
Today, people’s insurance policies are typically generated from past behavior. Someone involved in many car accidents will pay higher premiums than someone with an impressively clean record. But this consideration in designing a policy is of no matter when computers are responsible for operation. Without active agents driving a car, the 90% of accidents caused by human error is rendered insignificant.
What can a $200 billion industry do when people play less of a part in the usage of its product? The answer seems daunting. Still, disputes over legality and responsibility remain up in the air, which presents a possible hope to insurance agencies who want to keep people responsible for driving. For now, cars’ automated capacities remain limited and those expected to come out over the next few years require the intervention of a human driver to navigate the trickier anomalies on the road.
One hope for insurance companies is the unsettled question of who will require insurance in the future. People will be held less responsible for the operation of a vehicle, which may simply mean lower premiums (an expected average of $475 cheaper total costs every year), and a declaration of responsibility from automobile companies themselves. For now, too much remains up in the air for insurance companies to make a move or for experts to predict what comes next for the world of auto insurance.