Do driverless cars need insurance?

All those who own cars must have insurance. 90 percent of car accidents are due to driver error. What if there is no driver? That scenario, as futuristic as it might sound is on the Horizon. Google, for one is experimenting with driverless cars. Will you still need insurance if you’re not the driver?

A recent article on the Marketplace website addresses that issue. The Insurance Institute for Highway Safety says that if all cars had some semi-autonomous systems, such as collision- and lane-departure warning systems, nearly a third of all crashes would be eliminated.

And what does fewer crashes mean? It means lower premiums for drivers and fewer losses for insurers to cover. According to the Marketplace, auto-insurance premiums totaled about $200 billion in 2013. Donald Light of the consulting firm Celent predicts premiums would be cut almost in half.

“The overall size of the automobile insurance industry, over say a ten-to-15-year period, is definitely going to shrink. The amount of losses are going to be a lot less and the premiums are going to be a lot less.”

Marketplace also points out that automated cars will have an impact way beyond the insurance industry such as fewer injured drivers, less need for repairs and lower demand for replacement parts and roadside assistance.

But will automated cars really be safer? It depends, says Neville Stanton who researches the safety of car automation systems at the University of Southampton in the UK. He found that the safety all depended on how automated the vehicle is. He found that the more automated the vehicle is , the less safe it is.

It takes drivers five times as long to respond in emergency in a fully automated vehicle as it does in a manually controlled vehicle.So the driver’s still manually in control of the vehicle, but the automation’s been there to support them in that driving task. So it’s not taking over that driving task.

Read more If cars don’t need drivers, do drivers need insurance?