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Will Self-Driving Cars Destroy the Auto Insurance Industry? (siliconvalley.com) 299

Posted by EditorDavid from the robot-chauffeurs dept.
An anonymous reader quotes an article from the Bay Area News Group: Imagine your fully autonomous self-driving car totals a minivan. Who pays for the damages? "There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson. Instead, the manufacturer of your car or its software would probably be on the hook... Virtually everything around car insurance is expected to change, from who owns the vehicles to who must carry insurance to who -- or what -- is held responsible for causing damage, injuries and death in an accident." Ironically, if you're only driving a semi-autonomous car, "you could end up in court fighting to prove the car did wrong, not you," according to the article. Will human drivers be considered a liability -- by insurers, and even by car owners? The article notes that Google is already testing a car with no user-controlled brake pedal or steering wheel. Of course, one consumer analyst warns the newspaper that "hackers will remain a risk, necessitating insurance coverage for hostile takeover of automated systems..."
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Will Self-Driving Cars Destroy the Auto Insurance Industry? More

Will Self-Driving Cars Destroy the Auto Insurance Industry?

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  • There is no reason that could not also be provided by the company. The remainder would be a conventional policy for the times you're driving manually. Perhaps rather different due to all the data available.

    • Re: (Score:3, Interesting)

      by whoever57 ( 658626 )
      A lot of people are looking at scenarios in which ordinary people won't own a car. Instead, they expect that people will subscribe to a car service. In that case, the car service will mostly self-insure.

      • I think this is right. When self-driving cars merge with Lyft or Uber or Avis, then a lot of people won't need to own cars at all. Open your smartphone app and request a small car to drive you to the supermarket - and 90 minutes later, request a large car to take you and your groceries home. Or schedule a van to take the family across town to Grandma's house or across the country to go to Disneyland. And it would STILL probably be cheaper than buying a car and making payments + insurance + gas + mainten

        • I think this is right. When self-driving cars merge with Lyft or Uber or Avis, then a lot of people won't need to own cars at all. Open your smartphone app and request a small car to drive you to the supermarket - and 90 minutes later, request a large car to take you and your groceries home. Or schedule a van to take the family across town to Grandma's house or across the country to go to Disneyland. And it would STILL probably be cheaper than buying a car and making payments + insurance + gas + maintenance (plus, in big cities, leasing garage space...).

          Perhaps each car service will merge with a different car maker....

          If you can afford it you can already do all that with existing taxi/van hire services. And if you can't afford it now, Lyft or Uber aren't exactly going to provide subsidised services for the poor in the future, are they?

          It's always going to be more convenient to have your own vehicle.

  • Insurance (Score:4, Insightful)

    by fluffernutter ( 1411889 ) on Sunday June 19, 2016 @02:44PM (#52348327)
    If I have an automated car and I had to have (driving, expensive) insurance for the times I switched it to manual then I wouldn't want a car that could be switched to manual. If companies can confidently stand behind their products, then it isn't a problem for them to accept responsibility because they won't be causing problems. Therefore, I would expect AI insurance to be around the same price as for a $20-30K piece of property that may get ruined due to reasons beyond the owner's control. Judging by the my property insurance cost, that should be around $30 a year.
    • Essentially, AI driven cars mostly remove the 'risk' factor from the insurance actuarial table and leaves just the cost to 'make whole again'.

    • What happens when 5 people stop off the sidewalk together and the only way to avoid that group of 5 is to run down another person who is on the sidewalk?

      The issue with this problem is that the manufacturer is going to have to consider and program the car for this type of problem. In other words, a decision will have to be mostly made in advance.

      • What happens is that the car will react to unexpected obstacles the way most humans do this, except making the decision much faster and assessing the situation more accurately, perhaps along the following lines:
        - attempt a full stop while remaining in the same lane.
        - if the vehicle cannot stop in time, divert to another lane for the same direction or an emergency lane / row of parking spaces if there are no obstacles there.
        - if the vehicle cannot divert safely into another lane, divert into oncoming traf
        • So your answer to the trolley problem is that it can never happen?

        • Point is: such cars will most likely never make decisions between 2 targets;

          Most likely never doesn't mean never. And it is true that sometimes decisions have to be made. A drunk biker played chicken with me one evening a long time ago. I had to decide whether to make a high speed exit, which ended up with me wrecking my car and putting my passengers in danger. As it turned out, I made what was probably the wrong decision, My car did a rollover. Fortunately, no one of my three passengers was hurt. But I have always wondered what I would do if the situation occured again. It surely

        • (seriously: every so often I see women using a baby carriage as a means to clear a path, pushing it into traffic to make everyone stop so she can cross. What's up with that?)

          When you have a baby you turn into a sleep deprived zombie.

      • What happens when 5 people stop off the sidewalk together and the only way to avoid that group of 5 is to run down another person who is on the sidewalk?

        The issue with this problem is that the manufacturer is going to have to consider and program the car for this type of problem. In other words, a decision will have to be mostly made in advance.

        That's not relevant to the question of whether the owner needs liability insurance. Whatever the decision is, and whatever liability accrues, it's on the maker of the self-driving system.

        flufflemutter is right that the only insurance the owner of a purely automated car needs to care about is for protection against a tree falling on it, or similar.

  • The nature of insurance just changes, from covering individual drivers to insuring manufacturers and fleet operators for product liability. The biggest impact will be on the legal profession: a whole army of bottom feeders will disappear, to be replaced with smaller additions to corporate lawyer ranks. A whole genre of late-night TV advertising will be replaced by ads for body mods, escort services and medical tourism services.

    • Re: (Score:3)

      by Sique ( 173459 )
      In a certain way, it will, because revenues will plummet. If automated cars are ready for prime time, it means that they are causing significantly less accidents (and less expensive accidents) than manually operated cars. And that means that the rates per individual car will go down significantly, as the payouts per car will go down significantly. Even if manufactures take out insurances for any problems their cars could cause, it will be much less revenue for the insurer than if he could sell policies for

      • Even if manufactures take out insurances for any problems their cars could cause, it will be much less revenue for the insurer than if he could sell policies for each car at today's tariffs.

        Indeed, if the manufacturer provides coverage, they're likely to self-insure to the maximum extent possible. For example, the US Military self-insures it's vehicles. If you're hit by a GOV, Uncle Sam will be the one writing the check. It's substantially cheaper that way than trying to buy insurance for all those vehicles. Individuals need insurance mostly as a risk leveling tool - once you're large enough, it's cheaper to self insure, though many companies will contract some services from an insurance c

    • It really doesn't.
      If you're (for example) Tesla - there is no way in hell you're paying someone to insure for liabilities up to a few million per incident.
      You carry that risk yourself - with perhaps a small policy for exceptional circumstances (say you're found culpably negligent for a hacker attack that kills 10000)

      • Re: (Score:2)

        by Kjella ( 173770 )

        It really doesn't. If you're (for example) Tesla - there is no way in hell you're paying someone to insure for liabilities up to a few million per incident. You carry that risk yourself - with perhaps a small policy for exceptional circumstances (say you're found culpably negligent for a hacker attack that kills 10000)

        Yeah insurance companies usually have this kind of re-insurance too, if a huge hurricane/earthquake/flood damages a ton of property they're covered by an even bigger insurance company or union. That said, people probably want insurance for all the reasons you have house insurance, you need people to process claims, assess damages and whatnot. So I'm guessing Tesla will just act like a car manufacturer, if there's a defect they'll deal with your insurance company about it, doesn't matter if it's faulty autop

    • Re: (Score:2)

      by AK Marc ( 707885 )
      The real damage will come when the crash rates for self-driving cars are so much less, and the costs of insurance drop. That'll destroy the insurance industry.

      Between that and single-payer national health care, we could end up with no insurance, but better coverage.

      • Between that and single-payer national health care, we could end up with no insurance, but better coverage.

        There would still be homeowner's and such.

        The real damage will come when the crash rates for self-driving cars are so much less, and the costs of insurance drop. That'll destroy the insurance industry.

        Actually, I figure that it'll end up being insurance, more than anything else, that destroys the market for human driven cars once self-driving versions can do everything necessary except maybe off-roading.

        1. As part of the negotiations to get self-driving cars on the road without requiring an occupant to have an operator's permit(driver's license), I figure that self-drivers insured by the manufacturer will carry dramatically higher limits. IE here in the USA 100

        • There would still be homeowner's and such.

          Your household maid robot could be programmed to detect and extinguish fires, and to detect, photograph, and report burglars.

          • Your household maid robot could be programmed to detect and extinguish fires, and to detect, photograph, and report burglars.

            Which, like sprinklers, and home alarms, would reduce your insurance costs, but not eliminate them.

    • criminal liability issues will need to be worked out as well. All the way from tickets to trespassing to Vehicular homicide

    • The nature of insurance just changes, from covering individual drivers to insuring manufacturers and fleet operators for product liability. The biggest impact will be on the legal profession: a whole army of bottom feeders will disappear, to be replaced with smaller additions to corporate lawyer ranks. A whole genre of late-night TV advertising will be replaced by ads for body mods, escort services and medical tourism services.

      Most people with law degrees, and indeed those who have passed their local bar exam, don't ever work as lawyers. The reason for this is a combination of some people getting stars in their eyes about the thought of having what they perceive as such a prestigious profession akin to being a doctor (which has its own set of different problems), student loans that are handed out like candy, and universities that have really big law schools that feed on the uneducated.

      By uneducated, I mean this: There's an econom

    • Well yes and no. We still need claims adjusters. Ideally self driving cars will have an accident rate lower or much lower than humans already. Given the reduction in accidents, you would need far less claims adjusters for auto. BLS says that's 315,300 jobs in 2014 (but not distributed among accident types). And I agree, we will see impacts in legal as well.

      But don't forget traffic cops and the revenue that citations bring municipalities. And the body shops that repair damaged cars. And driving professions.

    • The nature of insurance just changes, from covering individual drivers to insuring manufacturers and fleet operators for product liability. The biggest impact will be on the legal profession: a whole army of bottom feeders will disappear, to be replaced with smaller additions to corporate lawyer ranks. A whole genre of late-night TV advertising will be replaced by ads for body mods, escort services and medical tourism services.

      I'm not sure things will change that much; other than some laws getting updated to cover driverless cars to clarify liability. Owners / lessors will still be responsible for any damages caused by vehicles they own or lease, even if they are self driving. Lawsuits may decide if the software developers and auto manufacturers share some liability; but even while that gets sorted out personal injury lawyers will still get clients and sue. Insurance companies will assess the risks form driverless cars and charge

    • The nature of insurance just changes, from covering individual drivers to insuring manufacturers and fleet operators for product liability. The biggest impact will be on the legal profession: a whole army of bottom feeders will disappear, to be replaced with smaller additions to corporate lawyer ranks. A whole genre of late-night TV advertising will be replaced by ads for body mods, escort services and medical tourism services.

      I suspect that individuals insurance will just shift to ransomware or drive by hack attacks.

      What tI am curious about is the kidnapping angle. Hacked car takes wealthy dude direct to wherever they hold him. Probably need kidnap insurance as well.

      Going off topic here, but imagine the possibilities. If there is a warrant out for you, or the police want to interrogate you, they can just use their backdoor and drive you right to the station. no need for messy arrests or other unpleasantness. As soon as your

  • Maybe (Score:3)

    by click2005 ( 921437 ) * on Sunday June 19, 2016 @02:49PM (#52348353)

    I'd bet self-driving car makers will be willing to spend tens/hundreds of millions trying to prove the liability isn't theirs.
    I foresee a lot of lobbying from Google etc to change the law regarding compensation or at least making it the car owner's liability.
    Victim sues the car owner then car owner is forced into arbitration because of the car software's EULA.

    • Re: (Score:3, Insightful)

      by fustakrakich ( 1673220 )

      The whole concept of car "ownership" will have to change. Autonomous vehicles will have to be operated more like a public on-demand service, like an elevator. Push a button on your phone, a vehicle shows up at the door, and off you go, the cost deducted from your card. It will have to be profitable to operate but the market must be open to real competition, even with state run operations. Otherwise service will be too selective.

      • Re: (Score:2)

        by DogDude ( 805747 )
        At least in the US, most people are very hostile towards public anything, these days. The industries will purchase their politicians like always and make sure that the American people will continue to pay through the nose.
      • Sure, I don't mind a public system as long as it can have a car in my driveway the instant I open the front door.

        • Sure, I don't mind a public system as long as it can have a car in my driveway the instant I open the front door.

          ....... and it is not full of the previous night's user's drunken vomit and condom.

      • Re: (Score:2)

        by sl149q ( 1537343 )

        The concept doesn't HAVE to change, it just will change.

        There won't be any requirement for you to only use services. You will be able to purchase and operate your own autonomous vehicles. It just that most people will realize that it is (maybe) a lot cheaper to subscribe for services than to own your own.

    • The car software's EULA will hold up in a civil court when the Victim sues google, the car maker, the subcontractors who did the software?

      What about an criminal court where the state is out for blood after that school bus was hit by truck doing 65 in school zone due to some software fault? If will be nice to see some ceo held in contempt of court who trys to hide under some NDA / eula / a long list of subcontractors and contractors. Just wait for the small town sheriff to put them in the local jail.

    • I'd bet self-driving car makers will be willing to spend tens/hundreds of millions trying to prove the liability isn't theirs.
      I foresee a lot of lobbying from Google etc to change the law regarding compensation or at least making it the car owner's liability.
      Victim sues the car owner then car owner is forced into arbitration because of the car software's EULA.

      Surprisingly, this is incorrect. They WANT the liability in this case - because their odds of an accident are so much less, they can bake the cost of it into the price of the car, while advertising 'YOU DON'T NEED TO BUY INSURANCE'. That's a powerful advertising tool that's even being used in Europe now by some manufacturers, who cover the insurance costs of certain vehicle for the first 3 years or so.

  • No fault insurance (Score:3)

    by Archfeld ( 6757 ) <treboreel@live.com> on Sunday June 19, 2016 @03:12PM (#52348429) Journal

    This will be the greatest push for genuine no fault insurance system. A few states have them, California tried but the industry got so deeply involved they gutted the bills and created a Frankensystem so convoluted and confusing that it actually costs more and makes the lawyers more money.

    • It likely wouldn't matter anyways. In my state (as I suspect the same in many others), the owner of the vehicle is financially responsible for any damages caused by the vehicle. You can even lose your driver's license as the owner if you knowingly allow someone who is not covered by insurance drive it.

      This law professor is typical of many people in the Ivory Towers, they don't quite understand how things actually work but have plenty of untried and untested theories on how they should. In California, you ha

      • > So the owner is still responsible whether he allows his neighbor to drive, or himself, or if it was stolen or whatever.

        Responsible was not correctly used here. The important part about having to show financial backing is that if something goes wrong the money is immediately available to start fixing the problems before assigning blame. If I loan my car to someone without insurance and they cause a accident and are at fault, they are still responsible (legally and financially). It is just setup so that

  • No (Score:2, Insightful)

    by rsilvergun ( 571051 )
    because owning your own car will still require it and everybody wants to own their own car. If fewer people can afford cars they'll just raise the rates, because it's a law.

    But socialized medicine might. I'm old enough to remember the debates around mandatory insurance and they were all based about trotting out poor little boys and girls that got their shit wrecked in a wreck and how they couldn't afford the doctors. Give us socialized medicine and a proper safety net and it pretty much makes car insura

    • Re: (Score:2)

      by Calydor ( 739835 )

      Give us socialized medicine and a proper safety net and it pretty much makes car insurance obsolete.

      I didn't realize socialized medicine is supposed to pay to have your car repaired after it gets t-boned. That is still going to be quite costly and will still require insurance of some sort. It is possible that it will start falling under the standard homeowner's insurance the more common autonomous cars become and the fewer accidents they cause/are involved in.

      • if you never use it. If your someone who does then, well, it's not so cheap. I've had my car totaled by another driver twice and both times got about half market value. The folks I know who get in accidents frequently pay $3000/yr. Meanwhile I've been paying $600 year since my 20s and never once got in a wreck. The folks paying the $3k/yr lose out because it's expensive has hell to drive. I lose out because I'm out $600/yr for nothing for 20 years of safe driving and would have come out ahead both times vs

  • Insurance companies won't suffer so much (Score:3, Interesting)

    by fustakrakich ( 1673220 ) on Sunday June 19, 2016 @03:17PM (#52348451) Journal

    They can sell anything.

    What will happen is that many municipalities will see a dramatic loss of income from traffic and parking* violations. That could indeed be devastating. People are gonna have to fire up the old still and go back to bootlegging to make a couple of bucks.

    *since the car can go off to find a space by itself, or simply drive around the block a few times.

  • The insurance industry will adapt (Score:5, Insightful)

    by timholman ( 71886 ) on Sunday June 19, 2016 @03:22PM (#52348481)

    "There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson.

    Wow, that's good to know. That means I don't need home insurance either, because I'm not operating the house; I'm just living in it like a resident in a hotel. Clearly the person who built the house will be liable. Oh, wait ....

    Could we please put aside these laughable "self-driving cars will be sued out of existence" arguments once and for all? Liability insurance can be purchased to cover situations in which you do not directly control events. For example:

    I own a house, and I pay insurance to (among other things) protect myself if I'm sued by people who may injure themselves on my property, even if I'm not at home. My insurance company is perfectly happy to sell me liability insurance, even for property I don't live in.

    It will be the same with self-driving cars. If you own one, you'll be able to buy liability insurance for it, just as you would for any other vehicle. The insurance industry will adapt perfectly well.

    • Wow, that's good to know. That means I don't need home insurance either, because I'm not operating the house; I'm just living in it like a resident in a hotel. Clearly the person who built the house will be liable. Oh, wait ....

      Different types of insurance, and misunderstanding of what 'liability' means.

      Now yes, most home insurance policies also covers liability - but that's because you're expected to maintain your property in a safe state, plus it's cheaper to sell you home insurance which covers both the home and liability - much like full coverage car insurance.

      When it comes to insuring a self driving car, it can get interesting. Most of the time, liability is the biggest expense, the mandated insurance. Full coverage is only

    • You are not liable for your house, and that is why house insurance is much, much less expensive. Why would anyone accept liability for an AI car? My the definition of AI you cannot be at fault. Literally, my house insurance costs 1/100th of what my vehicle insurance costs.
    • you're not legally required to purchase liability insurance to own and operate a home...
  • The auto insurance industry? Probably not. I suspect it will simply adapt. The organ transplant industry? Well, that's a different matter...

  • Are almost always answerable with "no."

    New headline: Will Good Editing Ever Come To Slashdot?

    No.

    New headline: Will Slashdot Ever Embrace Anything Besides Seven Bit ASCII?

    No.

    --
    BMO

  • For cars that can be driven by a human.
    Farmers for example, how does a self driving car manage to get off road and find its way to where they need to go. Transport trucks, backing a 40ft trailer to a bay door. People who tow boats or camper trailers or any traler for that matter.

    • Re: (Score:3)

      by Ly4 ( 2353328 )

      Backing up semi trucks using computers already exists (and they're pretty good at it):
      https://www.youtube.com/watch?... [youtube.com]

  • I'll still need to get insurance for my primary mode of transportation...

  • no (Score:2)

    by iggymanz ( 596061 )

    insurance companies know how to structure rates, been at it for centuries.

    also, the cars we have now are vulnerable to hacker takeover. nothing new there except I expect the autonomous ones to be more hardened just because of manufacturer mindset

  • Ownership is doubtful (Score:4, Insightful)

    by petes_PoV ( 912422 ) on Sunday June 19, 2016 @04:17PM (#52348703)
    With a self-driving car, there are many things that can go wrong and cause an accident apart from the driver.

    Insufficient maintenance being one.
    So I reckon that either accidents will involve a great deal of argument between the little guy (who bought the SDC) and the big guy (manufacturer) with the big guy making all sorts of accusations and demanding proof that every last servicing requirement had been carried out by an approved service agent. Or the car will remain the property of the manufacturer (or fleet owner) and it will be leased to the notional user. Thus removing the car's passenger from liability. But leaving them with a large monthly bill for ensuring the vehicle is kept mechanically perfect.

  • Either that or he's wrong (Score:4, Insightful)

    by PCM2 ( 4486 ) on Sunday June 19, 2016 @04:19PM (#52348721) Homepage

    Either all of that, or he's wrong and a legal standard will be set where it is the owner of the equipment who is liable, whether it is operating in autonomous mode or not. If that's the case, nothing much will change.

    I'm still half of the mind that autonomous cars are already in a Segway type situation, where you have all these wonks predicting that they're poised to transform all of society etc. but the logic just doesn't hold up:

    A.) Americans like driving.
    B.) Car manufacturers market various car models with features that cater to the fact that Americans like driving, because it's profitable.

    ...and the biggie...

    C.) Does anyone really believe autonomous cars will be sold to consumers without the ability for a human driver to take over in emergency situations? But if the autonomous mode can be disabled, then 1.) You will still need a drivers license to own an autonomous car, so no increase in convenience and no benefit to the disabled; 2.) The implication is that as the "driver," you must be alert to the possibility of emergency situations at all times, even in autonomous mode. This means you will have to pay attention as if you were actually operating the vehicle, which negates a lot of the value of a self-driving car. What's more, various cognitive processes will probably cause people to think they're in an emergency when they're not, causing people to turn off autonomous mode way more often than necessary, making the road much more unpredictable and (ironically) unsafe.

    So will autonomous cars be a thing? Almost certainly. In fact, it seems they already exist. Will private ownership of autonomous cars by US consumers ever be a thing? Don't bet on it.

    "Fine," you say. "Autonomous cars will be like fleets of robot taxis that you hire." But if most of the drivers on the road are still driving their own cars, then that negates a lot of the safety and environmental claims. Autonomous cars won't be able to optimize coordinated driving for fuel efficiency, for example, and all the marketing and all the newspaper headlines will be around how well they cope with unpredictable human driver behavior.

    And if it goes the other way and you start seeing autonomous cars bumper-to-bumper like taxis in NYC, how long will it be before someone asks whether these robot taxi companies are paying their share of the taxes used to pave the roads, install traffic lights, etc.? And then there's still the issue of who's liable if a blind guy gets in an accident in a robot taxi. Or if blind guys aren't allowed to hire robot taxis, who goes to court over the Americans With Disabilities Act?

    Don't worry, though. Once Google evolves into a full-blown defense contractor [washingtonpost.com], it will still be able to sell autonomous vehicles to the Pentagon.

    • As long as the requirement for C) exists, AI cars will likely be more dangerous than regular cars not less. Drivers who have not been paying attention to their surroundings for the previous 15 minutes will make bad candidates to suddenly pass the controls off to. Better to just have them involved for the full ride.
  • The insurance racket can't be destroyed soon enough. The amount that our government at all levels does to protect every segment of the insurance industry - auto, health, life, etc - is terrible. This industry can't die soon enough. Any other industry attempting to drive Ponzi schemes such as theirs would have been taken out long ago, but these guys have better lobbyists.

  • Ironically, if you're only driving a semi-autonomous car, "you could end up in court fighting to prove the car did wrong, not you,"

    Good luck proving it was the car when the manufacturer turns over 100m datapoints showing exactly what happened in every system for every 1ms for the past month.

    "I swear I didn't touch the wheel" will go the way of "my dog ate my homework"

  • If you have a self driving car you can bet there will 360 video of the entire incident to go through with exact speed logs. You will also be able to review the decision tree of the self-driving car.

    Wait for inevitable addition of all cars automatically reporting driving "deviances" to the authorities, or at least the insurance company consortium, with full data logs.

  • Before we reach the point where all the road traffic is self-driving vehicles, there will be an extended era of mixed use. During this period, automated cars will drive extra-cautiously, like the ones now in beta. It will be like having a few million more old people on the road. Manual drivers who are not that good will tend to get into more accidents as they impatiently fume behind slow auto-drive vehicles. Their insurance rates will spike. We are also likely to see self-drive adoption go much faster in ci

  • Think of how much better the economy would be if everyone had $200-$1000 a year extra to spend on something besides car accidents. Bad for insurers of course, but they can go on to do something more productive with their lives.

  • This seems like a dumb question. (Score:3)

    by fuzzyfuzzyfungus ( 1223518 ) on Sunday June 19, 2016 @05:58PM (#52349109) Journal
    Why would self-driving cars destroy the insurance industry?

    Even if we ignore the ability of incumbents to fight bitter rearguard actions for years or decades when their economic interests are threatened; it's not as though self-driving actually changes the basic risks associated with cars. In an ideal world, automated cars may be more reliable than human drivers, certainly less likely to be drunk or exhausted; but unless they somehow achieve infallibility, there will still be periodic accidents. And the whole point of car insurance(and the fact that it is generally mandatory) is that a car accident can easily cause more damage than most operators can afford to pay for, especially if injuries or deaths stack up in addition to mechanical damage.

    Nothing about the self-driving-ness changes any of this. It might change the determination of who is at fault; or increase the number of 'no culpability can be assigned' situations; but it will still be a situation of occasional ruinously expensive incidents with long periods of quiet, which is more or less exactly what insurance is constructed to cover.

    There will, presumably, be lots of fun arguing over who exactly carries the insurance, and what sorts of failure modes become the vendor's problem vs. the 'known risks' that the operator takes in using an automated vehicle on the road; but the same basic factors are in play.

    What will probably change is the flavor of actuarial data-mining that is popular: currently, it's all about scrutinizing the driver for direct and indirect signs of riskiness. If the driver isn't driving, they'll presumably shift to exhaustive scrutiny of system maintenance and where/when the vehicle is operated(since some roads and times of day will just be more risky than others). Insurers mapping out 'high-risk' zones and charging people who travel in them more definitely won't go badly or upset anyone. Not at all.

  • Self-driving doesn't change the need for insurance (Score:4, Informative)

    by Tony Isaac ( 1301187 ) on Sunday June 19, 2016 @06:09PM (#52349147) Homepage

    My house doesn't drive at all, but I still need insurance, because things can still happen to it.

    Anything that is expensive, that you can't afford to replace should something happen to it, will need to be insured. This notion that self-driving cars will destroy the insurance industry is just plain silly.

  • If you get into a car that has no controls that a human can use to directly control the speed and direction of the vehicle, then you are insane. I'd rather walk everywhere the rest of my life rather than get into some deathtrap like that.

  • Auto insurance isn't the only industry under threat.

    With reduced accidents, body shops and mechanics, paint shops, towing services, even traffic reporters will have less work and there will be job losses. Automated cars are liable to break down less due to diagnostics so fix-it mechanics will have less work than they already do, and dealers will see reduced traffic in their repair bays, and what work there is will resist having stuff added to repair bills because the automated cars will know what is wrong.

  • "There wouldn't be any liability on you, because you're just like a passenger in a taxi," says Santa Clara University law professor Robert Peterson."

    Somebody better tell the good professor the owner would be the first on hook.

  • As long as they require an attentive driver and a license process, there will be an insurance program at the ready

  • Let's start by saying that currently 12 states and Puerto Rico have no-fault auto insurance laws, and the car insurance business thrives there. Why? Because fault is really not the core important part of insurance. Insurance is there to cover the risk you cannot afford to pay for all at once if you have a problem. Regardless of who is at fault, if you're driving around in a 40,000 dollar car that the bank holds a 30,000 dollar note on, the bank is going to insist you carry insurance on the car.

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