Once a far-fetched dream limited to the minds of science fiction aficionados and comic book nerds, autonomous vehicles are on their way to become a reality for us in the near future.
Companies like Tesla, Google, and Volvo amongst others have taken great strides in the right direction to achieve the elusive complete automation in vehicles. Large automobile makers are pumping in great resources to gain the upper hand in the future of the automobile industry.
The idea of autonomous vehicles first arose in the 1950s and the technologies available before the advent of the 21st century sowed the seeds for automation with basics like cruise control and antilock brakes.
Vehicles, in general, have evolved from those nitty-gritty basic convenience features to advanced ones and are ready to take the jump from current driver assistance features to a world of partial autonomy by 2025.
As a booming market full of endless possibilities, the autonomous vehicles segment has also raised questions on the requirement of insurance for vehicles in an accident-free future.
Autonomous Vehicles and the Insurance Industry
Autonomy in vehicles is bound to come with its share of disruption in the insurance industry. Self-driven vehicles will get the concerned authorities entangled in the debate whether the driver is to be blamed for any unforeseen incidents/ accidents or the autonomous vehicle itself. This may lead to a game of toss between the consumers and companies making these autonomous vehicles. Volvo has cleared the air in this matter, stating that they will provide specialized insurance to its customers who foray into buying their autonomous vehicles.
A framework will need to come into effect regarding the changes in the landscape of driving on roads with a mix of self-driven vehicles as well as vehicles driven by people as the presently available semi-automated cars are unlikely to disappear in the next 50 years. The framework and insurance policies will need to be built around both the autonomous and non-autonomous cars.
A few years down the road, we would still require insurance policies as even autonomous vehicles would be at risks of accidents and repairs as well as thefts, just on a lower rate. But these policies would need to be equipped with redefined boundaries for risk profiling and insurance responsibilities.
But what does it mean for the customer and insurance providers? Let’s have a look.
Change for the Customers
Automation of vehicles will come with a lot of perks for the average consumer investing in vehicles with autonomous technology.
The huge inbuilt storage for additional data is set to be a game changer as an autonomous vehicle would be able to store up to 80 per cent more data in their systems. This is going to reflect directly as a convenient feature for vehicle owners who won’t have to manually store information like auto insurance policy renewal, upgrades required or any such insurance policy related data. All this would automatically get updated in the system.
The hassles of storing crucial data regarding vehicle ownership and insurance claims will extinguish.
Efficient claim administration will also ensure that you won’t need to call your insurance agents or get in touch to provide them copies and originals of documents. All this will be seamlessly transferred by the smart functionality of vehicles.
The seamless information transfer would also lead to faster settlement of claims as efficient data exchanges occurring between the insured vehicle and the insurance company would drastically reduce this time frame.
However, all this new technology and other improvements in the hardware and software of future vehicles will lead to high premiums for autonomous vehicles.
Changes for the Insurance Provider
Traditional insurance providers might face a risk of getting pulled into oblivion if they don’t make quick changes to their policies and adapt to changes. Non-traditional players including tech giants, OEMs and telecommunication companies can be expected to pocket a considerable amount of share in the insurance industry if an existing lot of insurance providers don’t up the ante.
The next generation of self-driven vehicles is also bound to be much safer, hence reducing the number of claims made against accidents. This will turn out to be a boon for insurance providers like Edmonton Car insurance broker.
Autonomous vehicles will also bring with them new problems including technological failures and cyber threats, which would require special insurance covers, giving an additional boost to the insurance industry.
As cars of the future will be smarter with huge data component stored into their system, reporting the exact causes of accidents, etc will get much easier and fraudsters looking to scam insurance agencies will find it harder to crack the nut. This again would be very beneficial for insurance providers.
On the other hand, autonomous vehicles and the sharing economy are going to have a directly proportional relationship where an increase in such vehicles will decrease the number of people buying these vehicles with more focus on sharing rides. A decline in car ownership is very likely to prompt a reduced number of car insurance policies sold.
Wrap Up
The bottom line? As technology advances rapidly, the insurance industry and consumers need to evolve and learn to embrace change. The insurance providers will need to undergo certain adjustments to streamline operations and be more efficient in the era of autonomous vehicles.
While the introduction of complete autonomy in vehicles won’t be the end of insurance providers as we know them today, it is certainly going to push them to change.
