Automation is inevitable. Funding is flooding, talents from Silicon Valley and across the globe are on a collective race to automate many aspects of human life. And we’re not just talking about factory robots here. We’re talking about multi-billion dollar industries from healthcare to customer service.
One of the industries projected to be primarily on the receiving end of this automation movement is Transportation.
You’ve probably heard about Tesla, the forerunning transport brand that uses a fusion of modern automotive tech and artificial intelligence to spawn driverless car prototypes. Tesla is making a noise and its prompting other automakers to follow Tesla’s trails – or at least to come up with more innovative ideas to achieve a parallel objective.
Today, they’re more than just dream cars – you can see actual models owning the roads. It’s only a matter of time before more advanced models with backseat drivers become the new norm.
Indeed, it ceased to be a question of how but when.
The future of car insurance
As more cars with advanced driving systems are able to navigate the roads with less and less manual maneuver, car insurance companies will begin to see a decrease in claims.
In fact, a report from the Insurance Institute for Highway Safety in 2016 revealed that:
- automatic braking systems reduced rear-end crashes by about 40 percent; while
- forward collision warning systems reduce them by 23 percent
Take note that these are just Level 1 function-specific automation. Having these features on your car alone can give you a free ride to insurance discounts as they prevent damage risks to the vehicle.
As we fully transition into self-driving cars by the early 2020s, where your vehicles should then be installed with more advanced systems that allow for semi-automated acceleration and braking control as well as navigation, auto insurers are projected to simply slash your premium by half of how much they relatively cost today.
Ridesharing services are seen to help hasten the process of transition from manually-operated vehicles as more people experience the advantage of self-driving cars without the initial need for ownership.
As more autonomous cars run on the road, collision records will decline and liability on what would then be rare occasions will rest on the hands of the automakers and manufacturers by 2040s. This would prompt vehicle owners to reduce their liability coverage – if they don’t ditch it altogether.
In the 2050s, personal insurance claims is predicted to drop to only 22 percent compared to 86 percent today as fully automated vehicles become the standard. At this point, car owners will no longer need collision protection or personal liability coverage.
This is also a crucial point for auto insurers. By then, the automakers will take possession of all the data that traditional auto insurers use to assess claims. The big question is: will automakers then be the new insurers, given that they already take liability of claims on damages by their vehicles?
It’s a very plausible future which makes a lot of sense. When automakers decide to take the market, won’t it be easier and more practical for everyone if they just charge the coverage premiums on top of car loan payments?
Not is it only seen as feasible but indeed, a very convenient shift for car owners who will then be leaving the driver’s seat to become back-seat passengers of their own smart, magnificent beasts.