Driverless cars divide motor insurance industry, says independent research

Driverless cars are the best example of new age technology on the roads. They are expected to fully hit the roads by 2021. These cars would have an automated assistance that takes charge of driving while making the driver absolutely free. One can sit in the driving sit and enjoy reading a newspaper or check their tablet whilst the car drives them to the desired destination.

While this sounds to be a fantastic concept, the reality may be different. The main question that arises here is what happens when an autonomous or automated car meets with an accident? Will the regular insurance policy work for it or not? The insurance industry has many concerns and demands the government to pass laws that allow the insurers to claim accidental damages from the car makes of automated cars.

The insurance industry is divided and demands clarity from the government. According to them the same or normal motor insurance policy would not be enough for the driverless cars. As there are chances of the manufacturers refusing the liability for recovering damages, standard car insurance would not work for automated cars. This has led the insurance industry to pause things and think about the possibilities of offering an insurance for an automated vehicle.

While ABI (Association of British Insurers) proposes that people with driverless vehicles can claim similar to what they do with normal cars. This has led to a split in the insurance industry and now all they want is a clear legislation or rule by the government. According to statistics, driverless cars would be the best things for consumers but, it may pin down car insurance premiums by 63% and the profits may go down by 81%. Although, this is a long term thing insurers are worried at the fate of providing cover for the automated cars in the UK.

According to insurance experts, Direct Line, driverless cars may not be a good news for the insurance industry and they can have "a major impact on the size and nature of the insurance market and the role of insurers".

This clearly suggests that insurance industry needs to take new measures for driverless cars which could be a tedious task. One of the ways to insure autonomous cars is to cover the vehicle and not the driver. Another method would be to pass the liability to the manufacturer. However, this may not work out as cars it is difficult to find out whether the car part is at fault or the software that operates it. So, this may not work out.

One of the suggested option is to impose a government tax that ensures that every autonomous car should be ensured. So, if the cars get advanced then there would be two insurance systems - one for autonomous cars and another for manual vehicles.

Brijesh is a personal blogger and passionate financial advisor living in the London. He works at FreePriceCompare.com a price comparison website in the UK.