5 ms·

History suggests it won't be that clean. 1. High-severity accidents might drop, but the industry bleeds money on high-frequency, low-speed incidents (parking l

by harikb 10mo ago

History suggests it won't be that clean. 1. High-severity accidents might drop, but the industry bleeds money on high-frequency, low-speed incidents (parking lots, neighborhood scrapes). Autonomy has diminishing returns here; it doesn't magically prevent the chaos of mixed-use environments. 2. Insurance is a capital management game. We’ll likely see a tech company try this, fail to cover a catastrophic liability due to lack of reserves, and trigger a massive backlash. It reminds me of early internet optimism: we thought connectivity would make truth impossible to hide. Instead, we got the opposite. Tech rarely solves complex markets linearly.

Karrot_Kream 10mo ago
I doubt autonomous car makers will offer this themselves. They'll either partner with existing insurers or try to build a separate insurance provider of their own which does this. My guess, if this actually plays out, is that existing insurers will create a special autonomy product that will modify rates to reflect differences in risk from standard driving, and autonomy subscriptions will offer those in a bundle.
- bobthepanda 10mo ago
  Bundling a real product with a financial institution is a time tested strategy. Airlines with their credit cards are basically banks that happen to fly planes. Starbucks' mobile app is a bank that happens to sell coffee. Auto companies have long had financing arms; if anything, providing insurance on top of a lease is the natural extension of that.
  - SideburnsOfDoom 10mo ago
    > Auto companies have long had financing arms I have in fact heard it said that VW group is a financing company with a automobile arm. From some points of view, that seems correct.
  - ghaff 10mo ago
    Auto companies, yes. As I understand it, airline credit cards are mostly just co-branded cards with existing banks like Chase.
    - bobthepanda 10mo ago
      Frequent flyer programs are basically banks if you consider miles/points are currency.
      - ghaff 10mo ago
        That's different from the credit cards themselves--given the points degrade in value. (And which I should really start to use more.)
lotsofpulp 10mo ago
> High-severity accidents might drop, but the industry bleeds money on high-frequency, low-speed incidents (parking lots, neighborhood scrapes). Autonomy has diminishing returns here; it doesn't magically prevent the chaos of mixed-use environments. This seems like it can be solved with a deductible.
- manwe150 10mo ago
  I think parent might be implying that a 10 mph collision can total a car just as effectively as a 100 mph collision. There might be more left of the occupants, but the car itself might be still a total loss from a cost-to-repair perspective
  - lotsofpulp 10mo ago
    True, but another thought I would have is these modern cars should have sufficient sensors to be able to stop and avoid collisions at low speed.
michaelt 10mo ago
> Insurance is a capital management game. We’ll likely see a tech company try this, fail to cover a catastrophic liability due to lack of reserves, and trigger a massive backlash. Google, AFAIK the only company with cars that are actually autonomous, has US$98 Billion in cash. It'd have to be a hell of an accident to put a dent in that.
- johnebgd 10mo ago
  They know it’s cheaper to buy/lobby congress to limit their liability and will do so long before they payout real money.
- KeplerBoy 10mo ago
  The provider of the insurance can always insure itself for that catastrophic case. It's called Reinsurance.
- BillinghamJ 10mo ago
  They'd still at least buy reinsurance etc anyway. All unlimited liability insurance companies (e.g. motor insurers in the UK) have reinsurance to take the hit on claims over a certain level - e.g. 100k, 1m etc. For extreme black swan risks, this is how you prevent the insurance company just going bankrupt. Reinsurers themselves then also have their own reinsurance, and so on. The interesting thing is that you then have to keep track of the chain of reinsurers to make sure they don't turn out to be insuring themselves in a big loop. A "retrocession spiral" could take out many of the companies involved at the same time, e.g. the LMX spiral.
  - reportingsjr 10mo ago
    I believe google/waymo uses Swiss Re for reinsurance, so you are correct.
- observationist 10mo ago
  If it's cheaper for them to pay lawyers a few tens or hundreds of millions to bury any such case in court, in settlements, or putting the agitator through any of the myriad forms of living hell they can legally get away with, then they'll go that route. You'd need an immensely rich or influential opponent to decide they wanted to march through hell in order to hold Google's feet to the fire. It'd have to be something deeply personal and they probably have things structured to limit any potential liability to a couple hundred million. They'll never be held to account for anything that goes seriously wrong.
WillPostForFood 10mo ago
Auto insurers don't face a "catastrophic liability" bankrupting scenario like home insurers might in the case of a natural disaster or fire.
- SoftTalker 10mo ago
  A bad hail storm comes close. Hail damage can total a car.
  - hardolaf 10mo ago
    Cars are the cheap part of auto insurance claims.
    - cjrp 10mo ago
      Exactly this; damaging a building or causing the death of a person can be 10x+ more costly for the insurer.
    - bluGill 10mo ago
      Only when you are looking at one claim. If all the cars in a city get hail damage the total costs exceed the typical daily claim losses.
      - prepend 10mo ago
        I think the point is that it’s much less than all the cars. And a hailstorm that knocks out 10,000 cars is very rare. But hurricanes or fires that knock out billions in homes happen almost every year.
  - rasz 10mo ago
    Euro importers love hail damaged Copart cars, very cheap to fix here.
  - duskdozer 10mo ago
    Would auto insurers have enough insured cars within the area of a hailstorm to matter though?
bsder 10mo ago
> Autonomy has diminishing returns here; it doesn't magically prevent the chaos of mixed-use environments. It doesn't prevent chaos, but it does provide ubiquitous cameras. That will be used against people. I'm ambivalent about that and mostly in a negative direction. On the one hand, I'd very much love to see people who cause accidents have their insurance go through the roof. On the other hand, the insurance companies will force self-driving on everybody through massive insurance rate increases for manual driving. Given that we do not have protections against companies that can make you a Digital Non-Person with a click of a mouse, I have significant problems with that.
- chihuahua 10mo ago
  Yes, imagine you bought a Google self-driving car for $70,000, and one day their algorithm gets mad at you due to a glitch, and your Google account is locked, your car can no longer be unlocked, can't be sold, and your appeals are instantly rejected and you have no recourse. Just a typical day in Google's world.
- vineyardmike 10mo ago
  > I'd very much love to see people who cause accidents have their insurance go through the roof. Life is hard and people make mistakes. Let the actuaries do their job, but causing an accident is not a moral failure, except in cases like drunk driving, where we have actual criminal liability already. > the insurance companies will force self-driving on everybody through massive insurance rate increases for manual driving. Why would manual driving be more expensive to insure in the future? The same risks exist today, at today's rates, but with the benefit that over time the other cars will get harder to hit, reducing the rate of accidents even for humans (kinda like herd immunity). > Given that we do not have protections against companies that can make you a Digital Non-Person with a click of a mouse, I have significant problems with that. I absolutely think this is going to be one of the greater social issues of the next generation.
  - potato3732842 10mo ago
    >Why would manual driving be more expensive to insure in the future? The same risks exist today, at today's rates, but with the benefit that over time the other cars will get harder to hit, reducing the rate of accidents even for humans (kinda like herd immunity). I think it will get cheaper because people who want to do risky things that detract from driving will self select to drive autonomous vehicles.

by harikb 10mo ago

Karrot_Kream 10mo ago

I doubt autonomous car makers will offer this themselves. They'll either partner with existing insurers or try to build a separate insurance provider of their own which does this. My guess, if this actually plays out, is that existing insurers will create a special autonomy product that will modify rates to reflect differences in risk from standard driving, and autonomy subscriptions will offer those in a bundle.

bobthepanda 10mo ago
Bundling a real product with a financial institution is a time tested strategy. Airlines with their credit cards are basically banks that happen to fly planes. Starbucks' mobile app is a bank that happens to sell coffee. Auto companies have long had financing arms; if anything, providing insurance on top of a lease is the natural extension of that.
- SideburnsOfDoom 10mo ago
  > Auto companies have long had financing arms I have in fact heard it said that VW group is a financing company with a automobile arm. From some points of view, that seems correct.
- ghaff 10mo ago
  Auto companies, yes. As I understand it, airline credit cards are mostly just co-branded cards with existing banks like Chase.
  - bobthepanda 10mo ago
    Frequent flyer programs are basically banks if you consider miles/points are currency.
    - ghaff 10mo ago
      That's different from the credit cards themselves--given the points degrade in value. (And which I should really start to use more.)

lotsofpulp 10mo ago

> High-severity accidents might drop, but the industry bleeds money on high-frequency, low-speed incidents (parking lots, neighborhood scrapes). Autonomy has diminishing returns here; it doesn't magically prevent the chaos of mixed-use environments. This seems like it can be solved with a deductible.

manwe150 10mo ago
I think parent might be implying that a 10 mph collision can total a car just as effectively as a 100 mph collision. There might be more left of the occupants, but the car itself might be still a total loss from a cost-to-repair perspective
- lotsofpulp 10mo ago
  True, but another thought I would have is these modern cars should have sufficient sensors to be able to stop and avoid collisions at low speed.

michaelt 10mo ago

> Insurance is a capital management game. We’ll likely see a tech company try this, fail to cover a catastrophic liability due to lack of reserves, and trigger a massive backlash. Google, AFAIK the only company with cars that are actually autonomous, has US$98 Billion in cash. It'd have to be a hell of an accident to put a dent in that.

johnebgd 10mo ago
They know it’s cheaper to buy/lobby congress to limit their liability and will do so long before they payout real money.
KeplerBoy 10mo ago
The provider of the insurance can always insure itself for that catastrophic case. It's called Reinsurance.
BillinghamJ 10mo ago
They'd still at least buy reinsurance etc anyway. All unlimited liability insurance companies (e.g. motor insurers in the UK) have reinsurance to take the hit on claims over a certain level - e.g. 100k, 1m etc. For extreme black swan risks, this is how you prevent the insurance company just going bankrupt. Reinsurers themselves then also have their own reinsurance, and so on. The interesting thing is that you then have to keep track of the chain of reinsurers to make sure they don't turn out to be insuring themselves in a big loop. A "retrocession spiral" could take out many of the companies involved at the same time, e.g. the LMX spiral.
- reportingsjr 10mo ago
  I believe google/waymo uses Swiss Re for reinsurance, so you are correct.
observationist 10mo ago
If it's cheaper for them to pay lawyers a few tens or hundreds of millions to bury any such case in court, in settlements, or putting the agitator through any of the myriad forms of living hell they can legally get away with, then they'll go that route. You'd need an immensely rich or influential opponent to decide they wanted to march through hell in order to hold Google's feet to the fire. It'd have to be something deeply personal and they probably have things structured to limit any potential liability to a couple hundred million. They'll never be held to account for anything that goes seriously wrong.

WillPostForFood 10mo ago

Auto insurers don't face a "catastrophic liability" bankrupting scenario like home insurers might in the case of a natural disaster or fire.

SoftTalker 10mo ago
A bad hail storm comes close. Hail damage can total a car.
- hardolaf 10mo ago
  Cars are the cheap part of auto insurance claims.
  - cjrp 10mo ago
    Exactly this; damaging a building or causing the death of a person can be 10x+ more costly for the insurer.
  - bluGill 10mo ago
    Only when you are looking at one claim. If all the cars in a city get hail damage the total costs exceed the typical daily claim losses.
    - prepend 10mo ago
      I think the point is that it’s much less than all the cars. And a hailstorm that knocks out 10,000 cars is very rare. But hurricanes or fires that knock out billions in homes happen almost every year.
- rasz 10mo ago
  Euro importers love hail damaged Copart cars, very cheap to fix here.
- duskdozer 10mo ago
  Would auto insurers have enough insured cars within the area of a hailstorm to matter though?

bsder 10mo ago

> Autonomy has diminishing returns here; it doesn't magically prevent the chaos of mixed-use environments. It doesn't prevent chaos, but it does provide ubiquitous cameras. That will be used against people. I'm ambivalent about that and mostly in a negative direction. On the one hand, I'd very much love to see people who cause accidents have their insurance go through the roof. On the other hand, the insurance companies will force self-driving on everybody through massive insurance rate increases for manual driving. Given that we do not have protections against companies that can make you a Digital Non-Person with a click of a mouse, I have significant problems with that.

chihuahua 10mo ago
Yes, imagine you bought a Google self-driving car for $70,000, and one day their algorithm gets mad at you due to a glitch, and your Google account is locked, your car can no longer be unlocked, can't be sold, and your appeals are instantly rejected and you have no recourse. Just a typical day in Google's world.
vineyardmike 10mo ago
> I'd very much love to see people who cause accidents have their insurance go through the roof. Life is hard and people make mistakes. Let the actuaries do their job, but causing an accident is not a moral failure, except in cases like drunk driving, where we have actual criminal liability already. > the insurance companies will force self-driving on everybody through massive insurance rate increases for manual driving. Why would manual driving be more expensive to insure in the future? The same risks exist today, at today's rates, but with the benefit that over time the other cars will get harder to hit, reducing the rate of accidents even for humans (kinda like herd immunity). > Given that we do not have protections against companies that can make you a Digital Non-Person with a click of a mouse, I have significant problems with that. I absolutely think this is going to be one of the greater social issues of the next generation.
- potato3732842 10mo ago
  >Why would manual driving be more expensive to insure in the future? The same risks exist today, at today's rates, but with the benefit that over time the other cars will get harder to hit, reducing the rate of accidents even for humans (kinda like herd immunity). I think it will get cheaper because people who want to do risky things that detract from driving will self select to drive autonomous vehicles.