While many people focus on how autonomous vehicles will allow them to relax rather than drive a car, one of the most important changes that self-driving cars will have on transportation in Pennsylvania will have to do with auto insurance. Insurance companies across the country are currently having intense internal debates over how to handle the inevitable issue.
Because the problem is still a hypothetical one – one that will not come to fruition until self-driving cars are more mainstream – there is still a lot of uncertainty. The personal injury lawyers at the Philadelphia law office of Gilman & Bedigian explain some possible outcomes.
From Liable Driver to Liable Vehicle
Fundamentally, the changes that completely autonomous vehicles will have on the field of auto insurance have to do with the fact that drivers will no longer be liable for a crash. Instead, vehicles will be responsible.
This difference would completely upend the insurance industry.
One practical implication would be that the following factors would no longer impact the costs of auto insurance coverage:
- Where the vehicle would be parked
- The driver's past driving record
- Prior accidents
- Traffic infractions
- Serious moving violations, like DUIs or hit-and-run convictions
- The style and type of car
- The driver's age and gender
- How many miles a person drives in a given year
Instead, the following factors are going to drive the costs of insurance:
- What brand of self-driving car it is
- The driver's history of taking manual control of an autonomous vehicle
- The software the vehicle uses
No More Insurance Fraud
Insurance fraud happens whenever someone makes a claim with their insurance company and intentionally exaggerates the extent of the damage or provides misleading information to dodge liability. Insurance fraud leads to the insurance company paying out more to cover the costs of the claim than necessary, leading to a windfall for the person making it.
Even if you have never committed insurance fraud in your life, you are still paying for it – insurance companies boost the costs of the premiums they charge for everyone to cover their losses to insurance fraud.
With autonomous vehicles, though, information about an incident would not come from a person. It would come from the data collected from the autonomous vehicle.
In theory, without the need for an insured person's input, the opportunity to commit insurance fraud disappears, the insurance company no longer loses money to fraud, and premiums for everyone would drop. In reality, though, this all relies on the insurance company having access to data about a crash.
Would Insurance Become Obsolete?
It is not outlandish to think that auto insurance would become a thing of the past, especially if – as recent trends in shared transportation seem to indicate – autonomous vehicles end up being hailed remotely and shared, like an Uber or a taxi, rather than owned by a specific person. In cases like these, the passenger in a self-driving vehicle would bear no more responsibility for a crash than a passenger in a taxicab. Additionally, passengers like these who rely exclusively on shared rides would have no reason to carry auto insurance.
The possibility that car insurance could disappear for people who use autonomous vehicles is not far-fetched. Autonomous vehicle manufacturers could agree and even tout their willingness to pay for the costs of crashes that their vehicles cause – essentially filling in the holes that an insurance company would fill.
Fewer Accidents Mean Fewer Insurance Claims
If autonomous vehicles do really reduce the number of car accidents, it would follow that there would also be fewer claims for insurance coverage, as well. A decrease in the number of insurance claims would lead to lower administrative costs for insurance companies which would, in theory, at least, lead to lower premiums for the insured.
However, the lower price that comes from fewer insurance claims might be offset by the increased complexity and cost of those claims. Fully automated vehicles are going to have to be equipped with sensors and computers that could cost thousands of dollars to fix after even a minor crash.
Pennsylvania's Existing Insurance Structure a Big Help
Insurance laws are dictated by states, not the federal government. While there are plenty of differences in the details, these insurance laws tend to follow one of two systems:
- Tort liability, which looks to put the costs of a crash on to the person who caused it, even if it was only through their negligence, and
- No-fault liability, in which insurance companies cover their insured person's costs, regardless of fault
No-fault liability is markedly closer to the insurance system that we are likely to have, once self-driving vehicles become mainstream: Rather than trying to apportion blame between drivers, it just requires insurance companies to cover their customer.
Luckily, Pennsylvania already uses a variation of the no-fault mechanism. In Pennsylvania, auto insurance policyholders can choose the no-fault system or the tort liability system when they buy insurance. While most people in Pennsylvania have elected to use the tort system so they can pursue all of their legal damages after a car crash, the state's insurance law already has answers in place as autonomous vehicles push car insurance towards a system that does not look to a driver's fault for a crash.
Philadelphia Personal Injury Lawyers at Gilman & Bedigian
Insurance has always played an outsized role in accidents that end with someone getting hurt, and car crashes are a prime example. However, when those accidents are no longer the fault of a person's misdeeds – whether intentional, reckless, or merely negligent – insurance will have to adapt.
How car insurance changes to solve the needs of the self-driving car revolution is something that intrigues the personal injury lawyers at the Philadelphia law offices of Gilman & Bedigian. By staying ahead of the curve on this developing situation, we aim to help innocent victims continue to recover the compensation they need and deserve for injuries they did not cause. Contact us online for the legal representation you need.