The great promise of driverless cars is improved safety. With this laudable advantage comes another, less-expected benefit that might help you pay for a connected car: Car insurance premiums will be lower. Insurance companies might not be too crazy about the projected loss of revenue, but the prediction is $22 billion less in car insurance premiums worldwide by 2020, according to IB Times.
Focusing first on safety, Volvo CEO Håkan Samuelsson said, “The impact on the insurance industry is likely to be significant but let’s not forget the real reason for this – fewer accidents, fewer injuries, fewer fatalities. Autonomous driving cars are the single most important advance in automotive safety to be seen in recent years.”
International wholesale reinsurance company Swiss RE and the Daimler, Audi, and BMW-owned mapping company Here published a white paper titled “The future of motor insurance – How car connectivity and ADAS are impacting the market.” ADAS stands for Advanced Driver Assistance Systems. In that paper, they predicted that without the new technology, if cars stayed at the 2015 level, worldwide car insurance premiums in 2020 would be $616 billion. With the anticipated ADAS developments, however, premiums will be $594 billion. Those figures are in U.S. dollars and do not adjust for monetary fluctuations or inflation. There’s your $22 billion.
To me, $22 billion seems like a lot of money, but consumers might want to keep expectations low. If you assume that the overall bill is $616 billion and it’s reduced by $22 billion, however, that only works out to a rounded 3.6 percent. Dollars and pennies count, but from this study, it doesn’t appear the individual savings will be all that much.
Car manufacturers may have additional liability with driverless cars. If a system fails to alert a driver in time to take corrective action or if a safety feature fails to work, and an accident happens, you can count on insurance companies and perhaps the people in the accident to look to the manufacturers for payment.