- As more Waymos and self-driving Teslas crash into our roads, Insurance companies must reassess how to cover these self-driving cars. Goldman Sachs predicts that insurance costs will be cut in half due to fewer human-caused accidents. But the liability could shift to automakers whose technology could fail or suffer from security breaches.
More self-driving cars are on the road, which has led to a reassessment of insurance costs and coverage, and who should blame the fenders and crashes. According to Goldman Sachs analysts, the $432 billion insurance industry must adapt to more self-driving cars, ostensibly leading to fewer human accidents.
“Autonomousness has the potential to significantly reduce the frequency of accidents over a long period of time and reshape the basic cost allocation of claims and legal liability for accidents,” analyst Mark Delaney and colleagues said in the note.
Technology companies have invested their funds in investment in autonomous driving technology. letter Already raised $11 billion in funding for Waymo, Including $5.6 billion Tesla CEO Elon Musk May says He hopes to drive autonomous robots on the streets of Austin, Texas this month.
Goldman Sachs estimates that the ride-hailing market for autonomous vehicles will reach $7 billion by 2030 (about 8% of the market), while trucks with virtual drivers will grow to $5 billion in the same time frame. While the prevalence of self-driving cars is likely to increase, Goldman Sachs does not expect a significant increase in viewing self-driving cars as individual cars in the near future, but says it expects vehicle-related costs to drop.
Early evidence suggests that the technology can effectively improve road safety by mitigating crashes, thus helping to reduce insurance costs. December 2024 study From insurance companies Swiss RE Compared with human-operated cars, personal injury claims were found in the liability claims analysis and property damage claims were 92% fewer than those found in the liability claims analysis.
Goldman Sachs predicts that insured costs will drop from $0.50 per mile in 2025 to $0.23 in 2040 over the next 15 years.
But Scott Holeman, director of media relations at the Institute for Insurance Information, warned that just because cutting insurance costs doesn’t mean consumers will fill their wallets.
Holman told wealth.
Who is behind the steering wheel?
With less potential for accidents, Goldman Sachs predicts that auto insurance will shift insurance products to a more focused on the severity of the accident, but less frequently. This shift also raises the question of who is responsible for the accident.
The note said: “The legal liability for an accident may change and may change the basic claim cost allocation between physical losses and the scope of liability.”
Analysts recommend that insurance pools increase focus on product liability and network coverage. Technical dilemmas can lead to data or security breaches that lead to crashes rather than human errors that lead to most car accidents. This shifts the responsibility from the driver to the manufacturer or technology company that works with the manufacturer.
“People are increasingly concerned about cyber threats or security risks, and someone can manipulate the vehicle – bad actors,” Holman said.
Although automation technologies seem to reduce accidents, they are still not perfect, and accidents can also be caused by technical flaws. In October 2024, the National Highway Traffic Safety Administration (NHTSA) Turn on the detector Electric car companies reported on Tesla after four accidents caused by Tesla in contact with sun glare, fog and dust in the air.
The vehicle still faces Different levels of supervisiondepending on the status of their operations. Transport Secretary Sean Duffy announced in April Intent to develop federal standards Used for self-driving cars.
Waymo has raised some signs of the future of more cars on the go and what the future of insurance will look like. Waymo’s Head of Risk and Insurance Tilia Gode, Tell MarketWatch Last year, the company insured its Level 4 cars (autonomous driving, but only in designated areas) similar to the fleet insurance model of a taxi company, where the vehicle is insured as a group rather than individually insured.
“Like any commercial entity, we have insurance coverage that can cover Waymo drivers during driving tasks,” Gold said. “Essentially, the transition from human drivers to autonomous systems is the driver – Waymo is the driver.”
This story was originally fortune.com
