Andrew Rose of Compare.com, an insurance comparison site, tells insurers, “You need to be completely freaked out by the idea of autonomous cars—and completely relaxed.” He said in a phone interview that in 30 years, it’s likely most of the auto insurance business will be gone. Autonomous vehicles will wreck less over time, which means lower premiums will be required to cover losses, and therefore less auto insurance will be required. “Insurers can relax,” Rose said, “because it’s going to take time to get there.”
While we are many years away from an autonomous utopia, where cars pick us up and drive us where we need to go without a human at the wheel, we are seeing the first steps toward self-driving cars. Volvo, Honda, Audi, Tesla—pretty much every auto manufacturer, plus Google and probably Apple—is incorporating advanced driver assistance systems (ADAS) into cars we can buy right now. As humans transfer driving tasks to computers, it raises questions for the insurance industry. There will still be crashes on the way to that autonomous utopia, and insurance companies want to know who’s going to pay. Volvo, for one, has stepped up to say that when one of its vehicles is in autonomous mode, Volvo is responsible for what happens. But that’s a rarity so far.