Are We About to Say Goodbye to Bad Driving and Expensive Car Insurance Policies?
Most of us think that we are pretty good drivers, and yet most of us also have the odd prang and suffer increased insurance premiums as a result.
In many cases, it doesn’t matter how careful you are if the motorist in the next car decides to take his eyes off the road for a moment, is slow to respond to traffic conditions or simply does something just plain daft. Now, however, driverless car technology could make those bumps and scrapes a thing of the past, as motor engineers tell us that new cars will all but eliminate bad driving practices, saving us from ourselves and the lapses of other drivers.
Industry insiders are now saying that driverless cars could be common on our roads by 2020, and they should have a significant effect on accident rates. This, in turn, could slash the cost of car insurance premiums. According to car companies, driverless cars have the potential to make injury and death from car accidents a thing of the past. Whiplash claims would also disappear, and the frequent bumps caused by bad supermarket parking would also disappear. This new technology and its effects on the car insurance industry were recently discussed by the British Insurance Brokers’ Association (BIBA) at its annual conference in Manchester, amid claims that there may be no need at all for car insurance in the very near future.
Around 25% of the new cars on British roads already have some form of driverless technology installed. These systems can variously park a car, wake a dozing driver by shaking his or her seat and apply the brakes when an obstacle is detected and the driver does not react quickly enough or the car drifts into another lane on the motorway without indicating.
Just the automatic braking system alone can reduce accidents by up to 45%, and car insurance companies are already offering discounts of around 10% for cars with the systems installed. The advance of such technology seems inevitable, and it is expected that cars will soon be able to take over driving duties themselves if the driver has had too much alcohol or is simply too tired to drive. Delegates at the BIBA conference heard that fully autonomous cars could account for 90% of new car sales in the UK by 2020, with the changeover gathering pace from 2018, when Mercedes and Tesla plan to introduce their autonomous cars to the UK.
The Society of Motor Manufacturers and Traders (SMMT) commissioned a report from consulting firm KPMG which predicted that 25,000 serious accidents and 2,500 deaths on British roads will be prevented every year by the use of autonomous cars by 2030. The report also concluded that, as accident rates plummet, car insurance costs will decline steeply and liability for any remaining accidents will be passed from the driver, where it lies today, to the car manufacturer.
The actual cause of most car accidents is surprisingly predictable and mundane. Around 71% of accidents are caused by reversing mishaps, and a further 23% are the result of parking issues. Together, these sorts of accidents account for 94% of all insurance claims, and they will be almost totally eliminated by autonomous driving technology. The remaining 6% of accidents will also be substantially reduced by the driverless car systems.
This means that car accidents could be almost entirely eliminated, so will there be any need at all for car insurance? As you might expect, the car insurance industry is insisting that it still has some kind of future. This may be true, because cars could still be vandalised or stolen or be damaged by falling trees when parked and so on, but the industry will look very different. Nevertheless, according to the KPMG report, car insurance premiums will halve by 2020 and continue to decline thereafter. This is great news for the motorist but rather more worrying for the thousands of people employed by the car insurance industry, which surely must begin to decline in size rapidly within five years.