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Tech companies and carmakers are deeply invested in building out their autonomous driving capabilities. GM's Cruise, Alphabet's Waymo and self-driving car divisions at Uber and Lyft are just a few organizations seeking to scale adoption of autonomous vehicles.
It's impossible to say exactly how self-driving vehicles will affect your day-to-day life, because they're still fairly rare. But a change is coming to the automotive industry, and insurance companies (and consumers) will need to adapt as autonomous vehicles become more common.
Insurance costs could be built into the price of a car
As early as 2015, Volvo announced it would pay for any accident caused by one of its vehicles equipped with their self-driving software that was in fully autonomous mode at the time of the accident.
This led some to expect that all carmakers would do the same. However, it's a complex issue.
If manufacturers were to accept liability, autonomous cars would be harder to afford. Even if the were cut in half, that amount could still add $10,000–$15,000 to the price of a new vehicle.
Personal auto insurance will endure
There aren't any laws regulating product liability insurance yet. While health insurance policies may reimburse you for the medical costs after a car accident, they're unlikely to cover pain and suffering or lost wages. But many auto insurance policies currently do.
Car owners will likely need to keep buying comprehensive insurance to be protected from these losses.
You may need to increase your car insurance limits
As car companies have added more complex technology to their vehicles, the cost of minor collisions has risen. These increases mean higher insurance premiums and higher policy limits.
Drivers today are at little risk of colliding with an autonomous vehicle. However, if you cause a collision with one, or any other high-tech vehicle, you'd likely get hit with a huge insurance claim. And as companies continue to put self-driving cars on the road, this will happen more often.
In California, as of November 2023, there were 48 companies with a permit to test autonomous vehicles. The state requires a minimum level of liability insurance for all drivers, but the property damage minimum limit is only $5,000. This amount would likely be too low to cover a collision with a high-tech vehicle.
The more advanced technology car companies add to their vehicles, the more car owners everywhere should consider buying more than the state minimum required auto insurance.
As the costs of these claims rise, legislatures will need to increase the minimum levels of insurance for drivers.
The number of vehicles equipped with self-driving technology increases every day. Carmakers and drivers alike should pay careful attention to how insurance companies and regulators respond to questions about autonomous driving technology.
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- While technology provides new, convenient solutions, it can also create life-threatening problems. For instance, cellphones help drivers navigate but can also contribute to distracted-driving accidents. Do you believe there is a point where damage caused by technology outweighs the benefits?
- New computers with built-in security software cost more than older models that require separate security software. In the same way, autonomous cars may one day have a bigger price tag to account for insurance. Do you believe "built-in" protection justifies a high price tag? Why or why not?
- Do you feel that the terms "autonomous" and "self-driving" are confusing to customers? Are you concerned that they might be used interchangeably? Why or why not?
- What ethical issues arise as people allow their tech to make decisions for them?
- At what point does autonomous technology hurt people's ability to learn and think critically and use their own judgment?
Associate professor, computer science and engineering, NYU Tandon School of Engineering
While technology provides new, convenient solutions, it can also create life-threatening problems. For instance, cellphones help drivers navigate but can also contribute to distracted-driving accidents. Do you believe there is a point where damage caused by technology outweighs the benefits?
Absolutely, but I think that it depends on the technology. I would argue that many technologies we use today fall into this category (Facebook, many types of plastic containers, etc.). Yet, we have a hard time staying away from things that are convenient but cause more harm than good, especially if we do not see the risks clearly.
New computers with built-in security software cost more than older models that require separate security software. In the same way, autonomous cars may one day have a bigger price tag to account for insurance. Do you believe "built-in" protection justifies a high price tag? Why or why not?
It will be interesting to see if this is actually true, especially a few years after adoption. Many of the projections show the number of accidents decreasing as autonomous/self-driving cars take over. As someone who doesn't enjoy driving, I certainly would pay more for a fully autonomous car, even if the risk of an accident were the same. For a less autonomous vehicle that still requires some manual intervention, I think the equation becomes trickier for me. I do think, overall, it will depend a lot on the consumer.
At what point does autonomous tech hurt people's ability to learn and think critically and use their own judgment?
People already trust things like Google Maps more than they should when navigating and have gotten into trouble by disregarding warning signs, etc. I think fully autonomous driving will in some ways be safer, because users can simply let the car drive for them. My concern is more for situations where the car expects the human to retake control to handle difficult situations. The switchover is difficult for the human to handle, and then being put in such a situation will certainly be a challenge.