Automated Vehicles Will Lower Insurance Rates

If you're like a lot of individuals in the U.S., you probably wouldn't shy away from an opportunity to put a little change back in your pocket. To drive legally, you need to have some form of automotive insurance. Depending on your age and driving history, it may be easy for insurance costs to get fairly high rather quickly.

Although they are still several years away from being common, autonomous will be available to the public sooner rather than later. The good news for you (and your wallet) is that autonomous vehicle technology has a tremendous potential to lower premiums substantially for individuals in the U.S., according to new research.

The good news is that automated vehicles will save you money on car insurance.The good news is that automated vehicles will save you money on car insurance.

If there once was a time that driver-less vehicles seemed impossible, it is now gone. No longer is it if driver-less vehicles will hit the road, but when. And while specific dates and even years are not certain yet, industry experts think that the first completely autonomous vehicle may be commercially available by 2018. 

How does that impact auto insurance?
Depending on the rate at which this exciting, new technology is adapted by the general population, insurance premiums have the potential to fall by as much as 20 percent in the first 20 years, according to a "Riding the Innovation Wave" report from reinsurance firm Aon Benfield. Paul Mang is the CEO of Aon Analytics. He stressed that while a reduction in auto premiums is quite possible, there are plenty of unknowns that have to be discovered before a clear picture can be formed. 

"Adoption of autonomous vehicles will of course be affected by many variables such as regulatory challenges, cost to the consumer, safety, vehicle ownership preferences, and the technology itself," Mang said in a statement. "We as an industry need to act quickly to ensure that we have the products available to align to the new paradigm; if we fail to do so, we only invite disruption."

Even lower rates in the future
Depending on the successful uptake of self-driving motor vehicles, the savings may extend even further than industry experts are currently predicting for the short term. The average auto insurance premium could be slashed by as much as 40 percent from where it is right now by 2050, according to the same Aon report. 

As to be expected, so much of the reason automated vehicles have the potential to lower the cost of insurance is their high level of safety. In recent months, researchers have released studies that suggest automated vehicles may be safer than motor vehicles driven by humans in the event of a crash, according to a study from the Virginia Tech Transportation Institute.

"When compared to national crash rate estimates that control for unreported crashes, the crash rates for the self-driving car operating in autonomous mode when adjusted for crash severity are lower," VTTI researchers wrote in the study that was released in January.

"There is still a degree of uncertainty with vehicles that aren't driven by people."

Researchers cautioned, however, that there is still a degree of uncertainty with vehicles that aren't controlled by people. The same concern is shared by officials with the National Highway Traffic Safety Administration. In an attempt to learn more about self-driving vehicles and introduce them the public at a gradual, methodic pace, the NHTSA recently submitted recommendations for how these cars are to be tested on the roads. In addition, it developed a 15-point safety assessment that automakers will need to satisfy in order to begin mass production.

"Automated vehicles have the potential to save thousands of lives, driving the single biggest leap in road safety that our country has ever taken," Anthony Foxx, Secretary for the Department of Transportation, said in a statement. "This policy is an unprecedented step by the federal government to harness the benefits of transformative technology by providing a framework for how to do it safely."

He also said that while there's an understandable degree of uneasiness that comes with introducing something foreign, there were plenty of concerns about aspects such as seat belts and airbags when they first came on the scene. Today, these formerly controversial safety elements have saved lives by the hundreds of thousands and are even required to wear by law in some areas.

Safety details
The 15-point safety plan covers just about every aspect of the development and use of automated vehicles. The plan outlines guidelines for testing protocols as well as calling for more strict adherence to universal standards across state lines.

Although the plan to regulate safety is detailed, it should not be considered a set of codified laws, according to Heavy Duty Trucking. Many of the proposed regulatory measures would require an act of Congress to be made possible. Instead of making laws, the DOT hopes to stay at the cutting edge of innovation in the automated vehicle industry so that it can closely monitor vehicle safety.

These guidelines will serve to benefit transportation industry professionals as well. By providing more clarity in how these new technologies are implemented, drivers can rest assured that they and others on the road with them aren't driving blind, so to speak.