The Future Impact of the Autonomous Car Economy

The development of the autonomous vehicle has made major ripples across the industries of finance, manufacturing, and technology. Self driving vehicles present an opportunity to empower those in our communities, protect our roads and highways, and increase the safety of thousands of drivers. New innovations bring the industry closer and closer to becoming commercially viable, although it will be several years until the full capabilities of the autonomous car are recognized.


Autonomous cars will have an enormous impact on the future of our world, but perhaps the most interesting industry impacted by their development lies in the industry of insurance.


Traditional insurance is guided by a set of statistics that calculate risk from a variety of factors. Teenagers and drivers with higher accident rates are considered to have higher risk, while more experienced drivers with fewer traffic violations are considered safer, and thereby have lower risk. Higher risk drivers ultimately pay much more than lower risk drivers, although both of their insurance premiums are uniquely affected by vehicle make, miles driven, and repair costs.


Self driving cars may disrupt the insurance industry as we know it by providing a system of protection known as ‘no fault’ or ‘split fault’ personal auto insurance. Insurance could be directly issued from autonomous vehicle manufacturers at lower rates and custom tailored premiums. The program would work in several ways:


  • Autonomous vehicle manufacturers will collect massive databases of information covering collision risks, accident rates, and driver behavior.
  • Liability concerns will shift from vehicle drivers to the vehicle itself.
  • Insurance premiums may be reduced for the consumer after each new vehicle update or upgrade.


As autonomous vehicles begin seeing more and more developments, it will be interesting to monitor the impacts made on the industry of insurance givebacks and beyond. See more in the infographic below:

insurance givebacks (infographic)