Self-driving cars could flip the auto insurance industry on its head
The industry will not be able to afford human agents sometime within the next ten years. This would be a good time to begin transitioning to a new area of practice, or a new line of work. This will affect everyone from insurance personnel to body and repair shops, paint shops, and on, and on.
More beyond the break.
As more self drive cars enter the market, insurers will be forced to layoff people. This will drive them to rapidly, and dramatically increase premiums on human drive autos. I doubt the states will be able to keep up with these changes, but it seems likely that this will drive human drive cars mostly out of the market.
I would suggest that people who enjoy driving, begin to think about Nurburgring style course near every city.
Nürburgring - Wikipedia, the free encyclopedia
The track could have hangers for auto storage allowing auto enthusiasts to show off cars in the hanger areas, race on some days, motor on other days, and parade on others.
I enjoyed the introduction.
"As the driverless car gets closer to reality, so too does the dilemma of how to insure the car and its owner.
The auto insurance industry faces upheaval in the next 25 years as the migration to autonomous safety features — and ultimately a self-driving car — shifts more of a car’s accident risk from the driver to the vehicle, analysts said."
Dilemma? There is no dilemma, we currently have myriad autonomous safety features, which the insurance industry has no difficulty pricing, it will be no different during any part of this process.
The only real dilemma is when to institute the Workers' Compensation like system of addressing injuries, temporary, and permanent disability. Yes, accidents will all but disappear, but they will not disappear. The remaining few do not need a length litigious system to assign fault, they will simply need a system to verify veracity of the event/limit fraud, and make the appropriate payments. No lottery like pain and suffering, simply medical payments, time loss, and permanent disability payments.
"We don’t want to see an environment created where you have vehicles that might not be nothing more than glorified golf carts autonomously operating among big-rig tractor trailers,” said Jim Whittle, assistant general counsel for the American Insurance Assn., a trade group for the insurers."
What he means is he does not want to see the golf carts among human driver big-rig tractor trailers. Self drive would be fine, they won't have accidents either.
By all accounts the trucks will go first anyway.
Self driving semi trucks, Luddites, Arm Chair Basement Internet Trolls, and the Gig Economy . . .
Back to the original article: "And don’t expect a price cut in auto insurance anytime soon. In fact, prices have been climbing in recent years because of a rise in the number of crashes that reflects more miles being driven, higher car sales and an increase in texting and other driver distractions, among other factors."
Ummm, dude, none of this will matter for the self drive auto, except for the other driver problem, and that insurance claim will be on him.
"Billionaire investor Warren Buffett, whose Berkshire Hathaway Corp. owns Geico insurance, told an automotive forum last year that “we would not be throwing a party at our insurance business” when self-driving cars arrive, even though that day remained “a long ways off.'"
If he doesn't he's bonkers. Insurance will simply become mostly an accounting function with few employees, and reasonable profits. What business owner would not want such a business. It will make money with very little human input.
"'These technologies shouldn’t be rushed to market without hearing voices from all sides” about insurance, Court said. The “robot car shouldn’t be developed without a formal process for the public to weigh in with their concerns.”
For instance, “our big fear is that in accidents in driverless cars, the human being is still going to be considered at fault because robots are presumed not to make mistakes,” Court said."
Understandable, but I would be nonplussed if the self drive auto did not record the drive data, and that data could be reconstructed to determine exactly where each car was prior to the collision. The Google cars do a very nice job of this, and it quickly becomes apparent where the fault lies, when you can see a visual representation of the human drive auto leaving its lane, and colliding with the self drive car, and the physical collision results confirm the representation.
"If it turns out that the automakers and their suppliers end up shouldering most of the liability, they might offer insurance themselves, said Donald Light, director of the North American property/casualty practice at the research firm Celent. They might even add the insurance premium to the sticker price of new cars.
“That’s another big threat to the current insurance industry,” Light said."
Assumes facts not in evidence, assumes anyone actually cares about the decline and fall of the auto insurance industry. First, there is scant evidence of how we will use these new vehicles, whether we will own them or simply use them. It seems best to keep the powder dry until we know these basic things. Second, I would gladly give up paying auto insurance premiums for my family even if it meant the collapse of the industry. I, frankly, don't much care about he health of the industry, I do care about paying the lowest premium possible.
"And just because the driverless car seems closer to reality doesn’t mean the vehicles will be commonplace, as in “The Jetsons,” for many years.
One reason, as Whittle of the American Insurance Assn. put it, is “the simple reason that a lot of people like to drive.'"
Whittle wins the most inane comment of the year award with that one. Lots of people I know, "love to drive." Until I ride with them, and listen as they complain, kvetch, whinge, and vent about other drivers, and how horrible it is to have to drive. These people would probably like to drive on a Nurburgring style track, but a 30 mile commute enervates no one in Portlandia. What we love is the romantic notion of driving, hair flowing in the wind, on an empty country road, we love the freedom driving promises but cannot deliver.
In addition, once it becomes clear that human drivers are at fault 99% of the time, and insurance revenues plummet, the insurers will not have the time or desire to deal with incompetent human drivers who cause accidents. Their premiums will skyrocket, forcing most human drivers to hang it up. The poor will be picked off by the low cost of a share ride self drive car, the middle class by the ability to be freed from slavishly driving their underage children everywhere, driving to the store, or shop, fueling, DMV, and all the rest of the hubbub that goes with owning a car. Plus homeowners will get 200 sq. ft. of new storage space for every car they give up.
But I love to drive!? I doubt they love it that much.