Auto insurance may experience a paradigm shift because of driverless cars

Driverless cars could have a major impact on auto insurance coverage and how companies protect drivers and their vehicles

Driverless cars may soon be quite common on the roads, and this could have a major impact on auto insurance coverage. According to Allstate CEO Tom Wilson, there will be an ongoing debate over insurance coverage for driverless vehicles for years to come. Currently, there are precious few driverless vehicles on the roads, with Google being one of the only companies in the world to apply such a vehicle in a real world environment.

Ensuring regulations and standards are effective may be a top priority for the insurance sector and state governments

Auto insurance can be a complicated issue, which is why regulations and standards concerning this coverage and how it pertains to driverless vehicles must be effective. Allstate’s Wilson notes that ensuring that people in a vehicle are safe is an issue that involves everyone in that vehicle. Vehicles without drivers introduce more complication to the matter of effective coverage. Wilson estimates that it will take 10 years before fully automated vehicles can become a reality, partly due to the insurance issues that exist.

Driverless cars could reduce the number of accidents on the road, effectively cutting down premiums

Wilson does believes that driverless vehicles will reduce the number of accidents on the road. Machine-to-machine communications are becoming more effective and this could have a positive impact on transportation in general. Fewer accidents mean fewer losses for insurance companies, which could lead to lower premiums on auto insurance policies.

New technology is already leading to lower insurance premiums for drivers

It may take time for driverless vehicles to become a reality, which means that auto insurance prices are not expected to fall dramatically for several years. Insurance rates are dropping, however, as some companies are using telematics to track how much a driver uses their vehicle. This technology has become the foundation of new usage-based auto insurance policies, which consumers only pay for when they are actually driving. For some drivers, this has lead to significant reductions in their insurance premiums.