With the ongoing motor vehicle advancements, such as self-driving cars and firms promoting shared mobility, more reports have been published featuring the likely changes that may emerge in the motor service markets. Most of the projected changes are now part of our reality since car manufacturers have already rolled-out and keep developing fully autonomous vehicles.
Indeed, it is almost a shared view among all stakeholders in the car manufacturing industry that the industry will undergo many changes in the next five to ten years as compared to those that have taken place in the last half of the 21st century. With this in mind, it is now evident that vehicle ownership is going to change with people opting to acquire self-driving cars or using the different transport means made available by firms utilizing the shared mobility model.
Impact on the Insurance Industry
The insurance industry is on the receiving end of these drastic changes and others that are expected to occur in a decade. Both self-driving cars and shared mobility are likely to have an impact on the insurance sector and insurance firms will have to adapt to this change soon enough. For instance, insurance rates in some states are expected to drop once self-driving cars become more available to to users.
Infrastructure is widely expected to change when self-driving cars become available, a factor that is expected to have an impact on how insurers operate. In the current situation, the insurance policies are designed based on the predictable behaviors of human drivers. However, with self-driving cars and shared mobility, insurance firms may have to revisit their policies to include factors that had not been part of their functions.
Shared mobility – insurers will have to do multiple covers
Shared mobility is likely to have an immediate effect on the insurance industry. The usage of cars will increase, leading to an increase in the number of road carnages. The insurance companies will have to cover people who are not related, implying that there will be more people insured-driving different vehicles.
Insurance may turn to be more like utility cost so as to attract a premium cost according to the usage of a car. On the other hand, insurers may apply the no-fault form where an insurance covers the owner’s vehicle only. Some new risks, however, will arise implying that insurers will need to develop new policies. Such risks include driverless-vehicle hacks and cyber security. Between the insurer and the manufacturer, who will cover these risks?
A vehicle that drives itself brings about more changes on the insurer when compared to multiple motorists utilizing the same vehicle. Insurers will be compelled to adjust their insurance policies. For instance, in the case where one of Google’s self-driving cars was involved in a collision, serious issues emerged concerning the safety of passengers in self-driving cars. No blame can be leveled against the autonomous car when a driver ran over a sore point and collided with the car resulting in the deployment of the airbags. This is certainly a scenario that the vehicle could not avoid. The problem of snow during winter is also likely to arise implying that it will be more difficult to use self-driving cars. With this in mind, safety issues have to be factored in before the automated machines start operating on our roads. This also means that there will be low cost insurance policies available for both the drivers and providers.
The end results of using self-driving cars will be an increase in the private car uses in all the urban areas. This is due to the greater comfort of using automated vehicles. The situation in the rural areas may remain constant. Shared mobility will increase if cars are made available to the young generation who currently utilize public transport.
Shared mobility will have a more instant impact on the insurance industry. The effect that will be brought by self-driving cars will be more overall. These two will force the insurers to get new ways of adapting to the changes they bring in the industry.
Source: Auto Insurance Center