The thought of driverless car might either make you elated or fret over its influence on auto insurance rates. While it's a bit early to comment, let's dig into details.
We have always conceived a machine-driven future that'll add convenience and added efficiency to our lives. And when it comes to our cars, we want the best. Thankfully, our hopes have turned into reality with the invention of the driverless cars. This advanced and leading-edge design in the automobile sector is truly exemplary. While some might be already elated about laying their hands on these cars, some might be jittery about its impact on the auto insurance premium costs.
Car that’s power-packed with safety mechanism
Self-driven cars come with numerous safety and security features that might actually trim your car insurance rates. It's quite known that progressions in technology have led to a drop in fatalities due to the addition of latest safety features. In fact, collision-related deaths while operating the most recent model of the car have reduced significantly over the years. Some of the cars with pre-collision assist with pedestrian detection technology and electronic stability control have a relatively lower risk of fatalities and rollovers. As insurance is all about risk, these beneficial features might actually result in its cost reduction.
Are insurance companies uptight about the future?
According to a report published by a US consulting firm, McKinsey & Company, there would be a remarkable decrease in car accidents by the mid-century . This could eventually have a negating influence on the insurance industry. Driverless cars could lower the price of premiums because there will be a likely drop in claims raised. There will still be a necessity for liability insurance because drivers have the option to drive the car manually but the coverage may vary. Another setback for the car insurance company could be a steep decrease in the need for theft protection coverage. Owners of driverless cars might not even demand theft protection due to the advancements in the car features. The helpful feature—“kill-switch” that won’t permit anyone except the owner of the car to turn the ignition on. These cars are also installed with state-of-the-art GPS tracking system for easy location of your car at all times. This feature will diminish the need for theft protection and will most likely reduce the overall amount paid on the coverage.
Impact of driver-less cars on its insurance
With all of the advanced safety features that the driverless car offers, there is still a probability that there will be no impact on auto insurance companies. For some years now, there have already been technological advancements in latest models of cars, but no significant differences have been noted in premium rates. For instance, many latest car models come installed with collision avoidance features such as front-end crash-warning systems and blind-spot detectors. Although these features are designed to assist drivers in avoiding accidents, there hasn't been a significant reduction in the number of accidents reported until recently. There might have been a decline in fatalities but not in the overall number of car accidents.
It's hard to conclude how driver-less cars will eventually affect auto insurance premiums in the remote future. But even though they will not put an end to all accidents, they are still a competent substitute to manually driven cars.