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Driverless cars and their potential impact on insurance

On Behalf of | Jul 13, 2018 | Car Accidents

New research has led to certain predictions about the fate of auto insurance companies in an age of driverless cars. Pennsylvania residents may be interested to hear some of these because such an age seems to be coming. A report from Bloomberg New Energy Finance states that the insurance industry will likely experience a gradual shift in the type of products it offers.

Driverless cars may make coverage for drivers unnecessary, but the companies that manufacture the autonomous technology will want coverage. Even minor fender benders will raise the average cost of accidents since the high-tech cameras, sensors and other parts involved are so costly.

Insurers will also have new revenue sources open up for them. For example, hacking is set to become a serious issue with autonomous vehicles, so companies could offer cyber insurance to protect against it. Companies that are quickest to adapt will certainly benefit from these transitions.

There may be a transitional stage where drivers only use their autonomous features at certain times, such as when parking or when dealing with traffic. Insurers could offer coverage for both drivers and vehicles as few do both right now.

Nonetheless, the predictions of Bloomberg NEF are less dire than previous ones. A 2016 Morgan Stanley report stated that the insurance industry would shrink by 80 percent by 2040.

As long as drivers are insured, their insurance company will continue to confront personal injury claims. For a claim to be successful, victims must show that the other driver was negligent or reckless and that they themselves were innocent or only partially to blame. A lawyer may be able to evaluate the case and figure out a fair amount for a settlement, negotiating for it once the proof has been established. If negotiations fall through, the lawyer might litigate.