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Self-Driving Cars Could Eliminate Insurance As We Know It

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How Self-Driving Cars Can Eliminate Insurance?

On July 13, Google showed off the prototype of its self-driving car at the Community School of Music and Arts in Mountain View, a Silicon Valley city located about 40 miles southeast of San Francisco.

Attendants at the event were able to get a close up look at the vehicle’s interior, which contained neither a traditional steering wheel nor pedals. Google has been testing the prototypes on roads near it headquarters since June.

The major California tech corporation is not the only one with skin in the game. Traditional automakers like Mercedes and Toyota have already introduced partial automation in their recent vehicles, including braking and parking assistance. They plan to take a gradual, accumulative approach towards full automation over the next decade.

Google and a few other tech companies, including Alibaba and Baidu, on the other hand, promise to deliver a fully operable self-driving car in five years. Their goal is to be at the forefront of an exciting new technology.

No More Insurance

You’ve probably already heard of the various ways self-driving technology could change the world as we know it: it could make traffic much more efficient and tolerable, completely overturn the transportation service industry, or even make car ownership unnecessary altogether with the creation of a “transportation cloud.”

According to an article in the Yale Journal of Law & Technology, self-driving technology could also render private insurance unnecessary, essentially eliminating the $200 billion dollar automobile insurance industry.

“If nondiscretionary-communicate vehicles became mandatory … there would be no need for private insurance, since all liability for AVs would be transferred to manufacturers,” writes Yale Law School student Jack Boeglin, the author of the article.

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Boeglin goes on to theorize that drivers who want to maintain their driving privileges in the world of autonomous vehicles would have to pay up. In case of an accident, data collected by the vehicle’s computer would be used to determine the percentage of the driver’s fault versus the fault of the vehicle, and liability would be assigned accordingly.

However, drivers who fully relinquish control to the vehicle’s telematics would not have any liability whatsoever, plus they wouldn’t have to pay an insurance rate. In other words, self-driving vehicles could help cash-strapped individuals save hundreds, even thousands of dollars. Whether this would be enough to motivate the general population to turn to self-driving cars remains to be seen.

The attorneys at Wilshire Law Firm are excited to see what changes self-driving technology will bring. If you would like to learn more about car accidents and liability, please visit our main site.

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