How Will Google’s Self Driving Cars Affect Car Insurance?


  • self-driving-cars

We live in the age of robots and anything that has a scope to get automated will do so with its share of pros and cons.  With advancing technology human race is inventing more machines that do not need anyone to operate. Can you even imagine that before 1950, even elevators were operated by someone and was not automatic? You had to wait for the ‘lift operator’ to get you to the correct floor. Whereas today you just get in one, punch in the floor number and there you are in a few seconds.

The ease of adapting to an automatic elevator did not happen overnight, there were many skeptical users. Many other common machines have seen automation as the norm. Just like there was a revolution stirred by assembly line production versus manual production. Now, Google has also taken the plunge into automating cars; a car that does not need a driver. While this may sound convenient and scary at the same time, how does it affect car insurance? Well, it is sure that auto regulations may have to change once self-driving cars hit the roads.

What Is A Self-Driving Car?

It has been over 100 years that autopilot was implemented in airplanes and today most pilots do not have to do ‘much’ while flying. Just like that, a self-driving car will make a huge impact on the society than any other invention in the last century. The positives are that roads will be less crowded; cities may plan better and traffic congestion would be way less. But what about collisions?

A self-driving car does not need a human to control it and uses radar, cameras, sensors, GPS etc. to scan the surrounding road conditions. The technology lets the car drive on its own under all circumstances and makes maneuvers around hazards too. There is very less need for human intrusion. To get a car up to the safety level expected in a real life situation, there are millions of permutations and possibilities that engineers test a car for. Major car manufacturers are teaming up with technology giants to invent the perfect self-driving cars; with millions of dollars at stake.

What is The Future of Self-Driving Cars

sitting in self driving car

Pretty soon self-driving cars may hit the market in a large scale and we would have a choice to buy one; albeit very expensive. A lot of us may be skeptical about getting in a self-driving car to drive us out from the dealer’s lot to home; all without touching it. While it is exciting, at the same time many may wonder about the insurance effects when you drive such a car. Well, a self-driving car has to perform in the tests to prove that it is safer than a human driven car to get on the roads. In 2009, Google started their self-driving car project that has now progressed to Waymo in 2016. This car is designed to scan using sensors and technology to detect cyclists, pedestrians, and even road construction. The scanning distance is almost a whopping two football fields in all dimensions and directions.

Insurance for Self-Driving Cars

Due to the operation of self-driving cars that need a human to start it, it would still be a human error if there was a collision. So, you would require the mandatory liability coverage too. If there was a software glitch that causes an accident then you may need the optional coverage to file a claim. Since these cars may not be the preferred choice due to its high cost and advanced technology, car thieves may stay away. Auto theft of self-driving cars may be very less compared to other cars. These cars may have a switch or code to disable the car’s functions. So, insurance prices may be less from the theft perspective and liability charges would depend on the type of collision. If a manufacturing defect caused a collision then either manufacturer product liability or third party liability coverage may apply.

When you become the owner of a self-driving car, it may depend on your insurer on how they calculate your rates. It could cost you more if other factors are also not favorable. These include your driving record, claims history, vehicle profile etc. A lot may depend on the claim statistics of such cars and if these cars are safe or not. If it proves to be unsafe on the roads and causes collisions then the liability, property damages, and fatalities claims may increase. If the insurance claims payouts for self-driving cars are on the rise then you may expect to pay more premiums. These cars are only as good as the driver’s input and any error could cause a collision.