Sunday, 24 December 2017

Self-Driving Cars And Their Impact on Insurance Industry

Self-driving cars are soon going to be a reality. Scientist and researchers have tested various self-driving cars to have a less accident rate. The self driving cars make car ownership easier than before. Few decades back, these cars were just seen in various science-fiction movies and people would have never thought it would become a reality. The self driving cars can have a big impact over the car insurance industry. Auto insurance is one of the huge and ever-growing industries in all the developed and developing countries. It is also one of the industries facing huge challenges due to various reasons. This article https://www.ft.com/content/99225360-e071-11e7-8f9f-de1c2175f5ce explains about self-driving cars.

There are many ways how self-driving cars affect the car insurance industry. First of all, you should understand that this industry thrives on collecting premium money from car owners. The insurance companies would increase premium amount if the risks are higher. With autonomous cars, the accident rates are sure to come down, thereby forcing the insurance companies to charge lesser premiums from the customer. This also minimizes the rate of the fraudulent claims and the insurance company would be able to put more focus on scrutiny.

With usual cars, the responsibility lies more on the driver. In most cases, the drivers are found guilty in the event of accidents. This is the reason why people with disabilities or poor driving records were considered as risky. With self driving cars, the risks factors would be transferred to the car manufacturers. So, in the future, insurance companies may have to deal more with the manufacturers rather than the drivers. The self driving cars make use of software for problem free driving. It is the software that takes the driving decision accordingly. However, the fact is that software could be hacked by someone, thereby causing accidents.

If the hacking could be done easily, then more accidents are bound to happen for sure. It is believed that the manufacturers would be made liable for the faulty software. With manufacturers taking huge liability, the insurance companies will have lesser work, post any accident. This is to say that insurance companies would need to change the way of operation once self driving cars become common.

No matter how the car technology has improved, one should not hesitate to get insurance. Though technology has made life simpler, it is not something that is free of risk. Having insurance will always give a peace of mind to the car owner.

It is believed that self driving cars would affect the insurance industry negatively. However, only time can answer about the magnitude of impact. Right now, the risks associated with self driving cars are not known much to the public. The insurance companies charge the insurance based on the risks factors only.

The insurance companies may need to work hard and smart to bring their revenues up if self driving cars are going to be prominent on the road. The insurance company relies more on marketing companies to boost their customer base; only time can answer all the questions.

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