How Driverless Cars Will Affect the Auto Insurance Industry
By: Good2GoPublished: April 5, 2016
The time of driverless cars may soon be upon us – out of the realm of sci-fi movies and into our garages. So what does this mean for the car insurance industry? Good2Go Auto Insurance took a deeper look at this impending phenomenon.
Cars on the road today are already equipped with autonomous-car technology. Certain models, typically of the higher-end variety, are able to detect the potential for an accident and make the necessary adjustments. There are rumors of automakers rolling out technology that will enable drivers to change lanes automatically or even drive hands-free – and the government is all for it. Federal and local governments are increasingly encouraging the use of three available technologies: telematics, collision avoidance, and automated traffic law enforcement. The goal is simple – lower the numbers of car accidents.
How long will it be before completely autonomous cars dominate our roads? It’s hard to say, but if money talks, then it won’t be long. Companies are investing both time and money to ensure they’re not left in the dust. GM recently announced a $500 million partnership with Lyft to create a network of on-demand autonomous cars. Ford plans on tripling its flight of self-driving Fusion Hybrid cars within the next year. 1
For the insurance industry, investments like these pose a potential threat to business.
The insurance industry will be forced to shift with the advance of driverless technology. Some insurance companies have taken note and invested in driver-monitoring technologies, or telematics. Telematics records driver activity like sudden breaking and speed of travel. Insurers are able to use this information to provide more affordable insurance to its drivers, but, what will happen when accelerating and breaking is left to software?
KPMG has predicted that within 25 years the personal auto insurance industry could shrink to less than 40% of its current size. 1 Drivers will rely on insurance coverage for strictly non-crash damages, like flooding or car theft.
So what does this mean for you, the consumer? It means cheaper auto insurance. And while lower premiums and decreased risk are a very good thing, it’s still important to have an insurance provider you can depend on while drivers are still in control. Good2Go provides coverage to fit your needs and budget, no matter what technology presents itself in the industry. Call (877) 200-9912 or visit us online for your free quote today.