Will self-driving cars make personal auto policies a thing of the past?

Will self-driving cars make personal auto policies a thing of the past?

Will self-driving cars make personal auto policies a thing of the past? The emergence of self-driving car technology will drastically change the streets for drivers – but brokers and carriers should also prepare for a whole new landscape.

As autonomous cars come to market it is increasingly likely the auto manufacturers themselves will assume liability for accidents, as Volvo has stated it will for all cars involved in its testing phase. The Swedish auto maker announced in April that it would take responsibility for all accidents that occur when their cars are on “autonomous” mode.

“We think that it puts pressure on the manufacturers to say the same thing,” says Anders Eugensson, Director Governmental Affairs at Volvo Car Corporation. He adds that Volvo’s confidence in their self-driving vehicles is so strong that assuming liability further illustrates to customers that the technology is safe.

“One of the reasons is that we want our customers to feel they can rely on this, that we are pushing out this technology and we are doing this in a way where we are fully responsible for it,” he says. “This is going to be so safe, and you can trust us - and because of that, if something happens, we assume the liability.”

Aside from the accident onus being lifted from drivers, Eugensson points to a sharp decrease in human at-fault accidents, which throws traditional forms of coverage into question. “First of all, a lot of the crashes will go away, along with a lot of the claims – the system will reduce the number of crashes caused by human error, and we know human error is responsible for 95% of all crashes,” he says. “And the insurance industry is in the businesses of repairing those claims and this will change the output for the industry, clearly.”

While it remains to be seen just how long it will take fully autonomous cars to come to market – Eugensson estimates they’ll be widely for sale by 2021 – the anticipated future of transportation removes drivers – including vehicle ownership and personal auto policies – from the equation altogether.

“Because you can have the cars coming directly to you, you can share vehicles instead of owning one. Currently (with borrow-and-drive systems), you have to go somewhere to pick your car up, and you have to drive somewhere to drop it off. But if the car can come up to you, drop you off and then sort itself out, people will ask, ‘why should I have a car in my driveway?’”.