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I think it's more likely going to be your cold empty wallet that prompts the change. As the shift moves on the insurance pool of manual only drivers is going t

I think it's more likely going to be your cold empty wallet that prompts the change. As the shift moves on the insurance pool of manual only drivers is going to get worse and worse and the rates are going to skyrocket.

nathanaldensr 9y ago
I keep seeing this repeated on various forums. My question is: why? If autonomous vehicles supposedly make driving so much safer, that would seem to indicate less accidents overall, which would lower insurance rates; after all, what would you be insuring against?
- LeifCarrotson 9y ago
  You insure yourself, not the other drivers. It's analogous to buying flood insurance. It's super expensive because the only people who buy it are those who live on floodplains. If the only people who bought car insurance are the riskiest drivers who are clinging to less safe forms of transport, and the rest of the pool that used to contribute premiums are now in safer, cheaper autonomous vehicles and different forms of insurance, then the manual group would need higher premiums.
  - rpenm 9y ago
    Insurance cost isn't about the number of customers, it's about risk distribution and concentration. Flood insurance in high-risk areas is expensive because claims are frequent, large and concentrated (large percentage of customers making claims at the same time). Unless future drivers become more accident-prone than today's drivers, their premiums will be similar. I don't see much incentive for adverse selection. The point GP was making is that as autonomous vehicles replace manual, the likelihood of an inter-vehicular accident should also fall for the remaining manual vehicles, lowering their premiums. A nice positive externality - more reason to subsidize autonomous vehicles.
kylec 9y ago
Let’s say we get to a point where being driven autonomously is cheaper and more convenient than owning and driving your own car. Wouldn’t the people that still choose to drive, despite the higher cost, be the people that like driving? And wouldn’t it make sense that these people would be pretty good drivers, get into accidents less, and therefore cost less to insure than the average driver today?
- kjksf 9y ago
  Do you like riding horses? You might or might not but most likely you don't know because you never had an opportunity to try riding horses and therefore you don't do it. Most people get a driver license not because they like driving (learning process is rather unpleasant) but because it's almost a requirement for living. When self-driving fleets are widely available, most 16 year olds simply won't bother learning to drive. Driving is an acquired taste, no one is born with innate desire to do it. After few generations it'll be a specialized skill (maybe police will keep using manually driven cars etc.).
- mannykannot 9y ago
  I would not bet on it, given that most of those who have, for example, crashed while drag racing on urban streets would probably fall into the 'like to drive' category.
  - qbrass 9y ago
    They'll just quit insuring their car. What's one more law broken?
chrismcb 9y ago
Why would rates skyrocket? They should go down. With autonomous cars the percentages of accidents should decrease. Insurance is based on percentages, so the cost should go down, not up.
- qbrass 9y ago
  Actually driving your car would put you into a higher risk category and increase your rates.
marssaxman 9y ago
Insurance rates for human drivers could easily skyrocket, relative to the rates for robot drivers, while declining in absolute terms, because the overall cost of providing insurance at all would decrease. You can see this effect today, with motorcycle insurance. Motorcycle riding is far, far riskier than car driving, and it is a largely voluntary activity. You might expect that motorcycle insurance would be spectacularly expensive relative to car insurance, but the opposite is true: motorcycle insurance is so cheap I don't even think about it, so cheap I pay for a year at a time - under a hundred bucks, I'm not sure how much exactly. Why is motorcycle insurance so cheap? Because providing motorcycle insurance is cheap. Insurers charge whatever they have to charge in order to make a profit over whatever they have to pay out, and motorcycle insurers don't have to pay out very much or very often. Step into a hypothetical future, where level-5 auto-driving is everywhere, and collisions overall have dropped by 100x. The cost of providing car insurance will necessarily also have dropped by 100x - perhaps even more, if the types of collisions which remain are less damaging. If most vehicles are driven by cautious, predictable robots, capable of maneuvering intelligently to avoid other vehicles, then even human drivers would get into far fewer crashes than they do today. One can imagine a drunk driver speeding and swerving down a highway but failing to hit anyone, because all the robot cars are casually and gracefully weaving out of its way. What can we expect, then, for people who still want to drive their own cars? Yes, likely they will pay a higher insurance premium for that privilege: but so what? With collisions overall being so rare, and car insurance overall being so cheap, insurance at a 10x or even a 100x markup compared to robot driving is still likely to cost less in absolute terms than car insurance does today. What's the big deal? People will continue to drive manually for fun, or because they like old cars, or because they live on a farm, or in the woods, or because they like to go camping out in the woods, or whatever. Manual driving is simply not going to disappear overnight like this article is suggesting. Instead, I think there will be a slow, steady drift toward automation, much like we've seen with the gradual transition from manual to automatic transmissions. Motorcycle riding won't be automated any time soon, that's for sure. What would be the point? So we'll have humans piloting vehicles on the highways for a long time to come, in some form or another.

nathanaldensr 9y ago

I keep seeing this repeated on various forums. My question is: why? If autonomous vehicles supposedly make driving so much safer, that would seem to indicate less accidents overall, which would lower insurance rates; after all, what would you be insuring against?

LeifCarrotson 9y ago
You insure yourself, not the other drivers. It's analogous to buying flood insurance. It's super expensive because the only people who buy it are those who live on floodplains. If the only people who bought car insurance are the riskiest drivers who are clinging to less safe forms of transport, and the rest of the pool that used to contribute premiums are now in safer, cheaper autonomous vehicles and different forms of insurance, then the manual group would need higher premiums.
- rpenm 9y ago
  Insurance cost isn't about the number of customers, it's about risk distribution and concentration. Flood insurance in high-risk areas is expensive because claims are frequent, large and concentrated (large percentage of customers making claims at the same time). Unless future drivers become more accident-prone than today's drivers, their premiums will be similar. I don't see much incentive for adverse selection. The point GP was making is that as autonomous vehicles replace manual, the likelihood of an inter-vehicular accident should also fall for the remaining manual vehicles, lowering their premiums. A nice positive externality - more reason to subsidize autonomous vehicles.

kylec 9y ago

Let’s say we get to a point where being driven autonomously is cheaper and more convenient than owning and driving your own car. Wouldn’t the people that still choose to drive, despite the higher cost, be the people that like driving? And wouldn’t it make sense that these people would be pretty good drivers, get into accidents less, and therefore cost less to insure than the average driver today?

kjksf 9y ago
Do you like riding horses? You might or might not but most likely you don't know because you never had an opportunity to try riding horses and therefore you don't do it. Most people get a driver license not because they like driving (learning process is rather unpleasant) but because it's almost a requirement for living. When self-driving fleets are widely available, most 16 year olds simply won't bother learning to drive. Driving is an acquired taste, no one is born with innate desire to do it. After few generations it'll be a specialized skill (maybe police will keep using manually driven cars etc.).
mannykannot 9y ago
I would not bet on it, given that most of those who have, for example, crashed while drag racing on urban streets would probably fall into the 'like to drive' category.
- qbrass 9y ago
  They'll just quit insuring their car. What's one more law broken?

chrismcb 9y ago

Why would rates skyrocket? They should go down. With autonomous cars the percentages of accidents should decrease. Insurance is based on percentages, so the cost should go down, not up.

qbrass 9y ago
Actually driving your car would put you into a higher risk category and increase your rates.

marssaxman 9y ago

Insurance rates for human drivers could easily skyrocket, relative to the rates for robot drivers, while declining in absolute terms, because the overall cost of providing insurance at all would decrease. You can see this effect today, with motorcycle insurance. Motorcycle riding is far, far riskier than car driving, and it is a largely voluntary activity. You might expect that motorcycle insurance would be spectacularly expensive relative to car insurance, but the opposite is true: motorcycle insurance is so cheap I don't even think about it, so cheap I pay for a year at a time - under a hundred bucks, I'm not sure how much exactly. Why is motorcycle insurance so cheap? Because providing motorcycle insurance is cheap. Insurers charge whatever they have to charge in order to make a profit over whatever they have to pay out, and motorcycle insurers don't have to pay out very much or very often. Step into a hypothetical future, where level-5 auto-driving is everywhere, and collisions overall have dropped by 100x. The cost of providing car insurance will necessarily also have dropped by 100x - perhaps even more, if the types of collisions which remain are less damaging. If most vehicles are driven by cautious, predictable robots, capable of maneuvering intelligently to avoid other vehicles, then even human drivers would get into far fewer crashes than they do today. One can imagine a drunk driver speeding and swerving down a highway but failing to hit anyone, because all the robot cars are casually and gracefully weaving out of its way. What can we expect, then, for people who still want to drive their own cars? Yes, likely they will pay a higher insurance premium for that privilege: but so what? With collisions overall being so rare, and car insurance overall being so cheap, insurance at a 10x or even a 100x markup compared to robot driving is still likely to cost less in absolute terms than car insurance does today. What's the big deal? People will continue to drive manually for fun, or because they like old cars, or because they live on a farm, or in the woods, or because they like to go camping out in the woods, or whatever. Manual driving is simply not going to disappear overnight like this article is suggesting. Instead, I think there will be a slow, steady drift toward automation, much like we've seen with the gradual transition from manual to automatic transmissions. Motorcycle riding won't be automated any time soon, that's for sure. What would be the point? So we'll have humans piloting vehicles on the highways for a long time to come, in some form or another.