Britain’s biggest auto insurance company announces a 5 percent discount off policies of Tesla customers who use their vehicle’s Autosteer function.
Autonomous driving systems are creating a cascade of potential policy changes in the auto insurance segments. Looking into the possibilities, some companies are taking proactive measures to orient their company’s direction towards the plausible realities of the future
One such company is Direct Line which, in a recent move, announced that they will provide Tesla auto owners a 5 percent discount on their policies if they activate the Autopilot functionality in their electric vehicles.Find a lender today.
Towards collective adoption
Direct Line, which is also Britain’s largest auto insurance company, says their agenda is to collect data on the impact of automation to road safety. They plan to use this data as input on how to adjust their insurance products should the technology cause a sweeping change to transportation in the future.
“At present the driver is firmly in charge so it’s just like insuring other cars, but it does offer Direct Line a great opportunity to learn and prepare for the future,” says Direct Line head of motor development, Dan Freedman.
Tesla is the frontrunner in producing and revolutionizing electric vehicles and autonomous driving. With its dynamic CEO and product architect Elon Musk, the company spearheads the creation of new technologies that will improve the future of transportation. But success in this area requires that other segments of the industry also put in efforts to develop along with these new technologies. Any good change requires collective adoption. So if Tesla is going to take this direction, others have to follow suit. And as with any significant change, there are bound to be some challenges.
Direct Line’s initiative offers a good example of this attempt for collective adoption. By adjusting their company’s goals towards a very plausible future, they are also encouraging – and perhaps maybe even challenging – others to tackle the same path.
Direct Line’s move, however, is not the first time that an auto insurance company adopted this strategy. In the US, a startup company in the same business called Root already offers a similar financial incentive to promote adoption.Get today’s rates.
Fatal human errors
This came after the National Highway Traffic Safety Administration (NHTSA) showed that the crash rate of Tesla vehicles dropped by almost 40 percent when the Autosteer function is activated. Musk then promised that Tesla will try to improve the vehicle’s autopilot system to ramp up the statistic by 50 percent.
In the US, car accidents claim over 37,000 lives every year. They cause around 2.35 million injuries. Globally, the death toll is 1.3 million in a year. The NHTSA established that 95 percent of such crashes are caused by fatal driver error.
The goal of autonomy is to help lower the statistic, and usher a new era of safer transportation via technologies that let the vehicles “talk to each other.” The mathematical precision in this model leaves no room for errors that are inevitable with human drivers.
As road risk is lowered by these new technologies, insurance companies are placed at risk of being obsolete. This is why as early as now, these companies are trying to position themselves in a situation where they can prepare how to stay relevant when worldwide adoption takes place. In fact, the change doesn’t need to be global. For auto insurance companies in the US, country-wide adoption is enough to warrant such actions.
But just how will they stay relevant?
Changes are in progress. Work is being done. And although the transition is gradual, preparation is definitely due as early as now.Click to See the Latest Mortgage Rates»