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If Cars Drive Themselves, What Does That Mean for Car Insurance?

Imagine it’s 2025. You’re phoning through the morning headlines while your autonomous vehicle navigates your 10-mile commute. Another self-driving vehicle owner is Snapchatting away in an oncoming lane, oblivious as you are.
Wham. The two cars collide on an icy intersection. Who’s at fault?
Most industry analysts say it’s the vehicle manufacturer, or possibly one of the technology companies that developed the various automated driving or safety features built into the car. In fact, in 2015, Google, Mercedes-Benz and Volvo all agreed to accept liability for accidents that occur when one of their vehicles is in autonomous mode.

Taking Control of the Wheel

If self-driving vehicles proliferate as predicted (analysts say they’ll be the norm in 2050), what will be the need for car insurance? After all, if your hands aren’t on the wheel and your foot isn’t on the gas or brake pedal, you’re no longer a driver, but a passenger. And how can a passenger be liable for an accident?  
It doesn’t take 15 seconds to figure out that self-driving cars may have us paying less than the $1,323 average annual auto insurance premium. But exactly how much less remains to be seen.
Until every vehicle on the road is fully automated, insurance coverage and premiums may be determined by the vehicle’s level of automation:

  • Level 1: Function-Specific – one or more features that can lessen the impact of a crash, like stability control and brake assist (Backup cameras don’t count)
  • Level 2: Combined-Function – technologies such as adaptive cruise control and lane-centering take over the vehicle in certain situations
  • Level 3: Limited Self-Driving – the car basically drives itself, but driver takes control in dangerous situations
  • Level 4: Fully Self-Driving – the fully autonomous rides that aren’t available to the public yet but promise to automate all driving functions

Consider the Safety Features

Some insurance companies already provide discounts for vehicles with accident-prevention systems. According to the Insurance Institute for Highway Safety, vehicles with automatic braking systems reduce rear-end crashes by roughly 40 percent, and 23 percent with forward-collision warning systems.
However, there will be plenty of automobiles around from decades past and that probably won’t change with the self-driving craze. If you choose to drive older vehicles, you will still require traditional insurance. And, as long as a manual driving mode is still available in any vehicle, human behavior—and liability—will always come into play.
Collision insurance makes up only a portion of the coverage your premium pays for today. Remember, thieves still steal cars, hail still dents metal, and so far anyway, autonomous cars can’t drive away from tornadoes and floods.
Given the costs of repairing and/or replacing these more expensive machines, expect comprehensive insurance coverage to live on and possibly cost more than it does today. Signs point to the car insurance industry evolving as the auto industry changes. 
When you’re ready to review your current coverage and compare your policy to today’s rates, give us a call at (855) 777-6090 or visit www.selectquoteautoandhome.com.
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