It’s no wonder that auto insurance is one of the American’s largest yearly sums. Car insurance costs per person measure nearly $2,500 a year, and have been steadily rising over time. In fact, research suggests that premiums are rising 6.4% per year.
Like anything else, insurance rates can be hacked. One of the best ways to do this is through technology — in other words, autonomous vehicles.
Understanding Insurance Rates
Insurance rates rise and fall according to certain set parameters. While some factors are outside of personal control, others are not. These include:
- Age: Teenage drivers are by far considered to be the riskiest drivers for insurance companies. Most automobile accidents are attributed to human error, which is more prevalent in younger or less experienced drivers.
- Accident History: Drivers who have been in a previous accident may have their premiums increased by over 41%.
- Demographics: Male drivers statistically pay higher premiums than female drivers.
- Car Type: Certain vehicle types, especially sports models, cost more per month than conventional street vehicles.
Car type is one of the most important factors of insurance rates today, and will continue to be one of the leading influencers of premiums in the future. The reason? Autonomous vehicles.
How Self Driving Cars Dash Insurance Rates
Autonomous vehicles have the potential to drive the driving game in a number of ways, especially with auto insurance premiums. Not only will self-driving cars hack the way we drive on the road, but they have the potential to hack insurance premiums in a big way.
Self driving car manufacturers keep large databases on vehicle accidents, risk percentages, and collision history. Rather than buying directly from insurance companies, autonomous vehicles present the opportunity to purchase policies directly from the manufacturers themselves.
Here’s how it would work:
- Instead of determining liability and fault through conventional methods, self-driving cars could present the opportunity of a split fault or no fault insurance policy.
- Manufacturers would have the perfect formulas for determining collision probability.
- Premiums may be decreased after each vehicle upgrade or model release.
By 2035, researchers believe that hacked auto insurance rates will save consumers up to $25 billion dollars. Whether or not you choose to adopt self driving vehicles in the coming years, their ability to hack insurance rates to more competitive costs cannot be ignored.