Infographic: Autonomous vehicles may lower insurance premiums

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The rising technology of autonomous vehicles is set to disrupt the world of driving, mileage, and interestingly, insurance.

Auto insurance is a requirement in all fifty states except Virginia and New Hampshire. The average cost of insurance premiums runs about $199 a month, or $2,388 a year. The costs associated with car insurance are large, but the costs post-accident are even larger. In fact, the statistics are staggering.

Important statistics include:

  • 94% of driving accidents are caused by human errors, including speeding, distraction, drowsiness, and driving under the influence.
  • 6% of accidents are caused by elements beyond the driver’s control (vehicle malfunction, the environment, etc).
  • The average insurance premium rises by 41% after a single insurance claim.

Autonomous vehicles may be the solution to higher insurance premiums and higher accident fatalities. Liabilities will switch from the driver to the automobile, protecting costs. Driver behavior and claim history will cease to be as relevant as it was previously. Moreover, new calculations must be developed to denote accident risk probabilities.

The cost of new insurance premiums will soon be calculated to the overall ‘intelligence’ of self-driving vehicles.  SDCMs (self-driving car manufacturers) own data centers capable of generating accurate statistics relating to accidents, collisions, and events that warrant an insurance claim. The ability to estimate statistical probabilities of auto accidents may lower insurance premiums by an enormous degree. Costs would drop significantly after every new release or model upgrade. In fact, many researchers believe that the adoption of autonomous technology by 2035 could reduce auto insurance premiums by $25 billion.

“Are you forced to assess people statistically looking in the rearview mirror? Or can you assess people individually, looking ahead with smart projections?” – Elon Musk

Whatever the future may hold, it is clear the autonomous vehicles will drastically change the face of insurance.

autonomous vehicles

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Last Updated on February 3, 2021.

Autonomous Vehicles
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