As autonomous vehicles roll out – and as that continues into the future – coverage rates will plummet.
A new report from Aon Benfield addressed auto insurance premiums in a world of self driving cars. It examined the insurance rate trends that will occur with the expected increasing popularity of autonomous vehicles.
The report suggested car owners will be paying a lot less for coverage when cars drive themselves.
The predictions are that the “industry pure premiums” will fall a full 20 percent from last year through 2035. This forecast was made while taking into account that the driverless car technology may be adopted at a moderate pace ad not a skyrocketing one. Aon Benfield predicted that auto insurance premiums would decrease by one fifth even with a steady adoption.
That said, if that same moderate adoption rate continues, the rates will continue their rapid fall. In fact, by 2050, if driverless car adoption has reached a nearly full adoption level, rates will have fallen by over 40 percent.
The Aon Benfield auto insurance premiums predictions took several different variables into account.
For example, they predicted that there will be an insurance premium decrease dovetailing with a forecasted 81 percent decrease in claim frequency as time goes on. This will occur following the commercial introduction of this tech in two years from now. It also made the assumption that behind that decrease would come a greater claim severity due to the cost of sensors and an increased expense regarding liability claims product handling.
The reinsurance broker pointed out that at the moment, driverless cars are designed with sensors built into the vehicle bumpers. While this promotes greater driving accuracy, it also means that in the case of a crash, they are the first component to be damaged.
Furthermore, the report suggested an upcoming shift in accident liability from the driver of the vehicle to “the future operator of the autonomous vehicle fleet.”
As this is a brand new technology, Aon Benfield’s predictions regarding auto insurance premiums for self driving vehicles have been based on historical precedent that has been set by other autonomous forms of transportation.