Insurers Preparing for a World of Autonomous Vehicles
When autonomous vehicles become ubiquitous, what will be the need for car insurance? That is the question auto insurers are beginning to face as autonomous vehicle technology promises safer roads and fewer accidents. At least one insurer, State Farm, is participating in research on driverless car equipment through collaboration with automakers and suppliers at the University of Michigan’s Mobility Transformation Center. This research is expected to help State Farm “understand what the risk will look like.” There is not yet much data on the effect truly autonomous vehicles or “semi-autonomous” equipment such as automatic braking may have on actuarial models and insurance pricing (although some insurers already offer discounts for certain types of semi-autonomous equipment). Insurers also recognize that the types of risk that will need to be insured is likely to change when autonomous vehicles hit the road, such as risks associated with hacked software or equipment malfunction.
