According to Insurance Business America magazine, driverless cars using GPS programming are expected to be on the streets of America within the next seven years.
In fact, they have been legal in California since 2012, when they were approved by the governor for testing purposes. Most people have seen the commercials that show vehicles with hands-free parking and parallel-park assist; however, the future of automobiles could be completely driverless. You would simply type in the GPS coordinates of your desired destination, push a start button and the vehicle would take you wherever you wanted to go. Since you wouldn’t need a license to operate a vehicle it wouldn’t be out of the realm of possibility for an elementary-aged child to take a car to school in the morning. Although this technology should be available within the seven year time frame, it is pretty unlikely that these vehicles will be affordable for the general consumer for at least 15 years.
As an insurance agent the first question I had was, “What would this mean for the auto insurance industry?” Because steering wheels, gas and break pedals could all be removed, the “driver” would have no liability in the event of an accident. The liability would have to fall to the manufacturer of the vehicle as the only way an accident should occur would be if there was a malfunction with the manufacturers programming, or equipment. This would mean that all clients who pay for collision coverage would be able to remove this coverage from their policy. As an auto owner, you would still need coverage for things such as hail and theft, but you wouldn’t be responsible for any property damage or injury as a result of an accident. Since manufacturers would have to cover the liability for all vehicles produced, they could potentially have one agent covering all of the vehicles they build. Because there are very few auto manufactures and a large number of personal lines agents, this could significantly impact the future of the insurance industry.
Although the technology will be available, it will likely take a while for the general public to be able to afford and also accept driverless cars. Many consumers simply enjoy driving and many others will have a hard time giving up control of their vehicle to a computer. However, no driver would mean no DUIs and probably, no speeding tickets because the vehicle would know the speed limit on the road it is traveling.
Driverless vehicles may seem far-fetched and a little bit too much like the Jetsons, but it is much closer than most Americans think. There are still many insurance issues to be worked out before any of this comes to fruition, such as determining who is at fault or what happens if a driver-operated vehicle were to get into an accident with a non-driver operated vehicle. However, the future of automobiles and auto insurance may change drastically in the not so distant future.
Insurance Sales Agent
Insure Forward, Fargo