Self-driving cars are among the latest and greatest technological innovations inching their way to the mainstream markets. Many argue that they are inherently safer than standard human-driven cars because of their ability to better avoid collisions and anticipate dangerous driving situations. While it’s certainly commendable to make our roads and drivers safer, those in the insurance industry may be concerned about the effects this trend could have on them.
A recent article on Business Insider discussed Tesla’s push for insurance companies to consider the necessary changes in insurance policies when accounting for self-driving cars. As mentioned in the article, Farmers Insurance opted to reduce Tesloop’s previous insurance costs by 25 percent due to a lower risk premium. This case study sparked a discussion around insuring autonomous technology and what those insurance policies could look like.
Removing, at the very least vastly reducing, human error when it comes to driving is a huge step in the right direction and will assuredly reduce risk for drivers. But it’s important for insurers to consider other risk factors, even if the risk of human error is being removed. Safety threats like defective programming or hardware or even hacking should be top of mind when assessing risk for autonomous vehicles.
Imagine if a ransomware user attacked a self-driving car; the driver could potentially be endangered by no fault of their own in a situation where they have little to no control over preventing the threat. And it’s not unheard of to hack a car system; some argue it’s easier than most systems susceptible to hacking.
There’s no doubt that the insurance market is in for a world of disruption as self-driving cars become more commonplace, but it will certainly not be struggling. Successful insurers will likely assess the arguably more risk-averse vehicles with a discerning eye and take into account all of the other non-human threats that come into play and technology takes the driver’s seat, literally.