There’s no denying it – introducing self-driving cars to consumers will spark a paradigm shift in the auto industry. But, as is typical for any groundbreaking innovation, there are some pushbacks that are delaying any “imminent takeover”. The government is slow to pass regulations allowing self-driving cars and consumers are wary of the implications. Are self-driving cars really that safe? And how expensive is a “robotic personal chauffeur” going to be? According to new research from Metromile and The Ferenstein Wire, these cars could save consumers $1,000 in car insurance every year. This might be the motivation needed to accelerate adaptation.
Self-driving cars have a near-perfect driving record thus far, and the few times that they are involved in an accident, it’s typically a human at fault. Once we have welcomed these “futuristic” vehicles into our everyday lives, does the need for car insurance become obsolete? The answer is no, but it will be dramatically reduced. While there will be a near elimination of collision-related accidents (estimated at a 90% reduction), coverage will still be needed for things like break-ins, being hit by an uninsured motorist, and weather-related incidents. Our actuarial team here at Metromile developed an insurance pricing model which predicts consumers will pay an average of $250 per year with an annual savings of $1,000. The model is based on the typical driving record of someone licensed 20 years in San Francisco, driving 12k miles per year, and incorporates evidence from Google’s detailed accident report.
Self-driving cars are still not yet legal for consumers, but you can expect to see some traction as their safety and value continues to be proven. Here at Metromile, we are positioned to adapt our per-mile insurance model as these autonomous cars are introduced to the general public. Because we are able to segment periods of time (like with our Uber partnership where we can identify if a driver is driving for Uber or personal use), we’ll be able to help distinguish between when a car is controlled by a human or a computer. And if per-mile insurance is truly a future-proof concept, why not get started and start saving money today? Learn more at metromile.com/insurance.