The Future of Auto Insurance

Over the past decade, auto insurance has experienced its share of changes, but the future is expected to bring even more. Mobile technology and social media continue to influence how customers interact with their carriers, including how claims get filed. The emergence of autonomous vehicles and shared transportation will create more changes as well, bringing new risks and transforming how policies get underwritten.
Although private passenger vehicles will continue to dominate the industry over the next 10 years, we should consider the following predictions.
More Car Sharing
Through services like Uber and Lyft, car sharing has become a viable option to get from point A to point B. Its popularity is expected to grow from here, with multiple fleets and owners creating larger networks and a greater trend of point-to-point transportation that will replace standard car ownership.
According to a report from Deloitte Consulting, this growing trend may have a drastic effect on insurance:

• Carriers will need to introduce new products and sales channels to target these networks.
• Policies will be needed by both drivers and fleet owners.
• This network opens up issues related to liability, collision and comprehensive coverage.
• Already, fewer younger Americans are owning cars but participate in ride-sharing. Among this demographic, these future policies may eventually become the norm as personal vehicles become too expensive.

Self-Driving Vehicles
Also known as semi-autonomous vehicles, these self-driving cars are still in their infancy and require a significant amount of testing before they’re ideal for personal use. Yet, insurance carriers have already started examining potential risks and solutions. Mainly, both the owner and the system manufacturer may need to split the responsibility. The owner may have standard auto insurance, while the system manufacturer may be required to take out commercial product liability coverage.
Two factors may eventually fuel the growth of the autonomous vehicle market. First, older drivers wanting to retain their mobility may turn to self-driving vehicles. Second, as ride-sharing, point-to-point networks spread out over a greater area, shared autonomous vehicles will essentially become small-scale public transit.
The second of these two scenarios may open up a new set of insurance products, including commercial autonomous vehicle (AV) insurance with comprehensive and liability coverage and policies for those who operate the vehicles. As a recent pedestrian accident in Arizona involving a self-driving car has shown, the fleet owner expects to shift most of the blame and insurance costs to the vehicle operator.
Shared Data
Today, if most insurance customers were asked about their data being stored and shared, they would likely object to the practice. As with the recent case involving Facebook and its related apps, stored and shared data frequently goes against the customer’s best interest.
On the other hand, data about driver habits – taken through mobile devices and computerized systems in cars – might have an upside: Giving a carrier a more comprehensive picture of your behavior on the road. In response, gathering this information may eventually become standard practice for establishing and adjusting rates and assisting with claim resolution.
As the auto industry continues to go through changes, be sure to keep in touch with your agent and regularly review your policy for adjustments. To discuss your current coverage, give us a call at 203.439.2815.