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If AI driven cars achieve a superior safety record there won't be many human drivers...the insurance premiums will price most people out of the market. That is,

by irln 11y ago

If AI driven cars achieve a superior safety record there won't be many human drivers...the insurance premiums will price most people out of the market. That is, the cost of insurance for human drivers will be exceedingly high.

cpitman 11y ago
I don't see why the cost would be any higher than it is today. If anything, driver-less cars would have lower insurance premiums. So if you can afford/justify your insurance today, you could still afford it in the future. I could even see all insurance getting cheaper, since the risk of accidents for all cars should decrease as the mix of cars gets more and more automated.
- Fuzzwah 11y ago
  Insurance companies like to slice their customers up into buckets of similar risk and charge more or less accordingly. Insuring an automated car will be cheaper. Insuring a manually operated car will be more expensive.
  - cpitman 11y ago
    Sure, it will be more expensive than the automated car. But why would it be more expensive than today? Why would automated cars on the road make manually operated cars more risky than they are today?
    - toomuchtodo 11y ago
      At the moment, there is no other option other than human driving cars. Once automated cars are a realistic option, insurance companies can properly price insurance for human drivers much higher (comparatively speaking). A self-driving car should have almost 0 risk, meaning the vast majority of cars (if self driving) would carry no risk to the insurer.
      - afarrell 11y ago
        yes, but that doesn't explain why the underlying risk of insuring human drivers would rise. Nor does it explain why, since the underlying risk is the same, Progressive wouldn't offer lower rates than Geico's.
        Consultant32452 11y ago
        I suspect that the risk would actually lower for the remaining human drivers as the AI vehicles are probably going to be better at predicting and dodging our stupid mistakes, resulting in fewer accidents even if we don't improve our driving abilities.
      - monochromatic 11y ago
        > Once automated cars are a realistic option, insurance companies can properly price insurance for human drivers much higher (comparatively speaking). What's "proper" about raising the prices for no reason? If they start pricing human drivers higher than they currently do, some other insurer will just undercut them.
- irln 11y ago
  I don't think that those that choose to drive would provide more risk than they do today, however, they would provide (my gut and no more) substantially more risk than driverless cars. What incentive would an insurance provider have to insure a human driver? Much higher premiums I suggest.
  - cpitman 11y ago
    The same incentive they have today: profit based on taking in more in then they have to pay out based on risk. If insurance companies arbitrarily bump up insurance for manually driven cars, then that opens up a market for someone to jump in and accurately charge based on risk.
    - avn2109 11y ago
      You presuppose that American insurance companies are not a very effective cartel, primarily functioning in the regulatory capture industry, with a side business in insurance. It would be cool if what you describe actually happened, but in the real world, premiums only ever move long-term in one direction: up.
      - kobayashi 11y ago
        More or less, I agree. With fewer accidents and fewer drivers insurance companies will be looking at decreased revenues. No company wants decreased revenues of that sort. Now, I'm not 100% familiar with the insurance industry and any regulatory capture that may take place, but then would be the time for a cartel to flex its muscles and ensure that startup insurance companies don't undercut them with fair pricing.
lsc 11y ago
>That is, the cost of insurance for human drivers will be exceedingly high. right now, in california, you are only required to carry on the order of $35,000 in liability insurance. Now, personally, I think this is completely crazy, that it defeats the whole point of liability laws, etc, etc, but the point is that unless you change that, even if the rates go way up for human drivers, if the insurance companies can continue to sell plans that are limited to only $35K in liability, people who don't fear bankruptcy will still very likely be able to buy that legally-minimal insurance for not all that much money.
- gambiting 11y ago
  Yeah, I've heard that before. It's crazy to me. The most basic insurance in EU is required to cover up to 5 million euro against damages to people and 3 million against damage to property. How US can only require $35k liability cover is beyond me. Does that not mean that in pretty much any accident you have to pay extra out of your own pocket? (that "basic" insurance costs me $150 for the whole year and allows me to drive anywhere within EU for unlimited period of time. I also have full comprehensive cover for which I pay another $500 for a full year that insures me against damages to my own vehicle and provides EU-wide breakdown cover).
  - lsc 11y ago
    >How US can only require $35k liability cover is beyond me. Does that not mean that in pretty much any accident you have to pay extra out of your own pocket? Generally speaking, only poor people carry the minimum liability insurance. Everyone else carries limits closer to yours, at least for damage to people; I mean, doing 3 million in damage to a human, I can see that. Doing that much damage to property would be... completely destroying a really nice house, which is unlikely. Also, by American standards, your rates look unrealistically low. maybe you could get something close to your level of liability coverage for that much every month. But... uh, yeah, this brings up another point (and why I don't know how much just a few million in liability would cost) - everyone who isn't poor here carries what's called "uninsured motorist" coverage... this is essentially insurance that covers damage to me if someone with minimum coverage is at fault and I get hurt and they can't pay.

by irln 11y ago

cpitman 11y ago

I don't see why the cost would be any higher than it is today. If anything, driver-less cars would have lower insurance premiums. So if you can afford/justify your insurance today, you could still afford it in the future. I could even see all insurance getting cheaper, since the risk of accidents for all cars should decrease as the mix of cars gets more and more automated.

Fuzzwah 11y ago
Insurance companies like to slice their customers up into buckets of similar risk and charge more or less accordingly. Insuring an automated car will be cheaper. Insuring a manually operated car will be more expensive.
- cpitman 11y ago
  Sure, it will be more expensive than the automated car. But why would it be more expensive than today? Why would automated cars on the road make manually operated cars more risky than they are today?
  - toomuchtodo 11y ago
    At the moment, there is no other option other than human driving cars. Once automated cars are a realistic option, insurance companies can properly price insurance for human drivers much higher (comparatively speaking). A self-driving car should have almost 0 risk, meaning the vast majority of cars (if self driving) would carry no risk to the insurer.
    - afarrell 11y ago
      yes, but that doesn't explain why the underlying risk of insuring human drivers would rise. Nor does it explain why, since the underlying risk is the same, Progressive wouldn't offer lower rates than Geico's.
      - Consultant32452 11y ago
        I suspect that the risk would actually lower for the remaining human drivers as the AI vehicles are probably going to be better at predicting and dodging our stupid mistakes, resulting in fewer accidents even if we don't improve our driving abilities.
    - monochromatic 11y ago
      > Once automated cars are a realistic option, insurance companies can properly price insurance for human drivers much higher (comparatively speaking). What's "proper" about raising the prices for no reason? If they start pricing human drivers higher than they currently do, some other insurer will just undercut them.
irln 11y ago
I don't think that those that choose to drive would provide more risk than they do today, however, they would provide (my gut and no more) substantially more risk than driverless cars. What incentive would an insurance provider have to insure a human driver? Much higher premiums I suggest.
- cpitman 11y ago
  The same incentive they have today: profit based on taking in more in then they have to pay out based on risk. If insurance companies arbitrarily bump up insurance for manually driven cars, then that opens up a market for someone to jump in and accurately charge based on risk.
  - avn2109 11y ago
    You presuppose that American insurance companies are not a very effective cartel, primarily functioning in the regulatory capture industry, with a side business in insurance. It would be cool if what you describe actually happened, but in the real world, premiums only ever move long-term in one direction: up.
    - kobayashi 11y ago
      More or less, I agree. With fewer accidents and fewer drivers insurance companies will be looking at decreased revenues. No company wants decreased revenues of that sort. Now, I'm not 100% familiar with the insurance industry and any regulatory capture that may take place, but then would be the time for a cartel to flex its muscles and ensure that startup insurance companies don't undercut them with fair pricing.

lsc 11y ago

>That is, the cost of insurance for human drivers will be exceedingly high. right now, in california, you are only required to carry on the order of $35,000 in liability insurance. Now, personally, I think this is completely crazy, that it defeats the whole point of liability laws, etc, etc, but the point is that unless you change that, even if the rates go way up for human drivers, if the insurance companies can continue to sell plans that are limited to only $35K in liability, people who don't fear bankruptcy will still very likely be able to buy that legally-minimal insurance for not all that much money.

gambiting 11y ago
Yeah, I've heard that before. It's crazy to me. The most basic insurance in EU is required to cover up to 5 million euro against damages to people and 3 million against damage to property. How US can only require $35k liability cover is beyond me. Does that not mean that in pretty much any accident you have to pay extra out of your own pocket? (that "basic" insurance costs me $150 for the whole year and allows me to drive anywhere within EU for unlimited period of time. I also have full comprehensive cover for which I pay another $500 for a full year that insures me against damages to my own vehicle and provides EU-wide breakdown cover).
- lsc 11y ago
  >How US can only require $35k liability cover is beyond me. Does that not mean that in pretty much any accident you have to pay extra out of your own pocket? Generally speaking, only poor people carry the minimum liability insurance. Everyone else carries limits closer to yours, at least for damage to people; I mean, doing 3 million in damage to a human, I can see that. Doing that much damage to property would be... completely destroying a really nice house, which is unlikely. Also, by American standards, your rates look unrealistically low. maybe you could get something close to your level of liability coverage for that much every month. But... uh, yeah, this brings up another point (and why I don't know how much just a few million in liability would cost) - everyone who isn't poor here carries what's called "uninsured motorist" coverage... this is essentially insurance that covers damage to me if someone with minimum coverage is at fault and I get hurt and they can't pay.