Did you dream of sitting your driving test in a virtual world while wearing a headset? Virtual reality is going to become huge, but I think it’s too late to affect the driverless car market. There is one industry that looks like it’s in slight trouble.
We’ve been asking what will happen to auto Insurance for years. Fortunately, we’re beginning to get some answers. It’s a good thing for the average person, but it’s maybe going to damage the industry. Let’s look at a few things that are coming to light.
1. Tesla Has Been Selling Car Insurance
Did you know Tesla has been selling car insurance in Asia for a while? The only reason they haven’t been doing it at home is because they wouldn’t get away with it yet. Still, it’s not going to change the way they think.
Tesla believes insurance should be built into the price of cars in the future. I doubt this is going to hurt large established companies like GoodToGoInsurance, but it could affect smaller ones in the short term.
2. We Know It Can’t Cripple The Industry
Let’s say driverless cars reduced accidents to zero, which is purely hypothetical. Are the manufacturers going to pay out when someone smashes a car with a golf club? They’re only interested in anything related to their software.
Buyers might get insurance when they purchase a car, but they’ll only be covered if they’re in a crash caused by a faulty car. They will need other insurance, which will make their lives even more complicated.
3. Crash Rates Are Actually Plummeting
Nobody knows how safe driverless cars will be when they hit the mainstream, but we do know Good To Go Insurance and other companies have experienced a drop it claims. It only relates to Tesla cars so it’s probably not noticeable.
The National Highway Traffic Commission said Tesla crash rates have plummeted by 40 percent since Autopilot was introduced. That doesn’t mean other car companies will be able to hit the same standards.
4. A Business Is Needs To Be Profitable
Big brands like Tesla think they can put other companies out of business because their software is superb. I’m guessing they’re probably right, but other manufacturers with driverless cars should be worried.
Everything could suddenly backfire on them. They could be left to pay massive sums of money because they’re not experienced in the insurance industry. Car manufacturers will run away from insurance if it’s not profitable for them.
5. The Auto Insurance Industry Is Dying
KPMG seems to think 60 percent of the Auto Insurance industry will be wiped out in the next 25 years. Even though they might be right it’s a bold claim to make. Guesses you made 25 years ago would be wrong.
They are kind of right because things will need to change. The Good To Go Auto Insurance you can buy today won’t be available in the future. Insurance companies will be forced into adapting to the times.
Things Will Change For The Better
If you’re a driver your insurance premiums will come down. Even if you’re an insurance company I’m sure you’ll find ways around the system. It looks like everyone will be a winner once driverless cars strike.