Self-driving cars will change automobile insurance industry

Although self-driving cars are not yet a common sight on Illinois roads, they very well may be in the near future. This radical new technology promises a future substantially free of automobile accidents, but there are ripple effects associated with this breakthrough. For example, the automobile insurance industry could face serious disruption.

The American insurance industry generates revenue in excess of $220 billion annually as well as hundreds of thousands of jobs. The number of ancillary businesses that rely upon insurers such as the car repair industry should also be considered. Although self-driving cars will allow employees of such companies to enjoy greater personal safety as they are on the road, the steady stream of serious automobile accidents that fueled their businesses may almost completely disappear.

Self-driving automobiles will still be required to be insured. However, some manufacturers have stated that they will self-insure their vehicles until the matter can be resolved. This may require them to program the technology in a manner that would prohibit vehicles from driving in or through neighborhoods that the companies regard as being unsafe, which could become a contentious issue for residents or businesses in those areas.

Although there has yet to be a serious injury or death associated with a self-driving car crash, it is expected that it will happen in due course. It may be next to impossible to develop technology that could safely avoid an impaired person who is behind the wheel of another vehicle and who suddenly veers into the wrong side of the road. Personal injury attorneys will still attempt to determine in these types of cases the party or parties that should bear financial responsibility for the losses of an injured victim.

Source: Forbes, “No, Self-Driving Cars Won’t Kill the Insurance Industry”, Patrick Lin, April 25, 2016