Will self-driving cars mean we no longer need car insurance?

Ninety-three per cent of car accidents are caused by human error. Take away the human element and, goes the thinking, you take away the risk of a mistake – and thus, the risk of crashing.

That’s the very promise of autonomous cars, which will revolutionise safety on our roads by making the crash-proof car a reality.

But some are now taking the logic a step further. If there are no crashes, will we still need car insurance?

What is an autonomous car?

The confusion surrounding the technicalities of autonomous car insurance is perhaps not helped by misunderstanding of the various terms involved.

That’s why the industry is trying to discourage the phrase ‘driverless car’: this is a vision that will probably never actually exist.

A pod that zooms you from point to point with no input whatsoever may never become a reality.

Instead, it is an element of autonomy that is important: cars are going to increasingly have autonomous functionality, taking over from the driver to ease the workload.

And it’s in the area of safety where such autonomous functionality will first grow.

Modern cars already offer Autonomous Emergency Braking, or AEB.

Global NCAP is pushing car makers to standardise this: if the car detects a crash up ahead, it will sound a warning and, if the driver doesn’t respond, automatically brake to either avoid the crash or lessen its impact.

Other features such as active cruise control, where the car will keep a set distance from cars in front, even braking to a complete halt (and getting underway again), are being combined with lane departure warning systems that monitor the white lines on a motorway – and even autonomously steer the car to keep it within the lane.

Eventually, cars will carry enough autonomous functionality to fully drive themselves. The addition of technology today, usually branded as advanced safety features, will add up to tomorrow’s autonomous car.

The technology is moving steadily towards the 'fully-autonomous' goal and getting closer everyday.

Will self-driving cars mean we no longer need car insurance?

Self-driving cars are likely to change the landscape of car insurance, but it's unlikely that car insurance will completely disappear.

As it is still many years away, the real answer is yet to be revealed.

However, these are the things relating to autonomous vehicles that could impact car insurance.

With self-driving cars, liability may shift from the driver to the manufacturer or the software provider. If a car is in an accident caused by a malfunction of the autonomous system, the manufacturer or company responsible for the software may be liable for the damages, rather than the individual driver. However, it is likely that there will always be a responsibility on the driver.

Traditional car insurance policies, which are based on the risk of human error, might evolve to focus more on the car's technology and system reliability. Insurers might offer products that focus on covering the car's software or potential system failures.

Autonomous vehicles rely heavily on software, sensors, and communication networks. This opens up new risks like hacking, software glitches, or data breaches. Car insurance could shift to cover these kinds of cybersecurity threats.