Driverless car technology could ‘significantly lower’ insurance premiums, says AA Insurance director Simon Douglas
The rollout of driverless cars in the UK could result in “significantly lower” insurance premiums for owners, according to AA Insurance director Simon Douglas.
Insurance: Driverless cars could lower premiums, says AA
Speaking to The Drum after the government’s announcement of a review into how the technology could be introduced in the UK, Douglas said practical issues such as insurance needed a “fresh approach” and while premiums would likely be high initially as the new technology rolled out, the longer-term prospects could be better for car owners.
“Driverless cars will need a fresh approach to insurance,” said Douglas. “Motor insurance is based on risk and much of the cost of a policy is associated with the driver – such as age, experience, past claims and convictions.
“If that element is largely removed then driverless cars could potentially attract significantly lower premiums than conventional vehicles, providing the technology that operates them is reliable and demonstrably reduces the likelihood of a collision.
“Underwriters will, however, want to be certain that the technology operating such cars, the opportunities for intervention by the ‘driver’ and other aspects of operation of such vehicles will present a lower risk.
“While initially premiums are likely to be high, if driverless vehicles prove themselves to be reliable and less likely to be involved in a crash then premiums will quickly fall.”
Business secretary Vince Cable announced today that driverless cars would be on public roads in Britain from January next year, and said it would put the UK at “the forefront of this transformational technology” and open up new opportunities for the economy and society.
In addition, the government has launched a review of UK road regulations to prepare fresh guidelines ahead of the introduction. The review is expected to be completed by the end of the year.
Technology giant Google has led efforts to create driverless cars and the company is working with Toyota, Audi and Lexus on introducing its technology to market. BMW, Mercedes-Benz, Nissan and General Motors are also developing systems.
Despite major players in the technology and auto markets preparing for change ahead, a recent survey from Contract Hire a Car showed that only 14.2 per cent of 2,000 respondents said they would buy a driverless car.
However, among the 35-44 age bracket, nearly a third of respondents (30.2 per cent) said they would invest in a driverless car.