Everyone likes the idea of a chauffeur. If you are a kid, it’s probably your mom. No matter who you are, a classy guy in a suit behind the wheel of your car sounds pretty cool. Nowadays, with the progression of technology, it seems as though we may be able to get the car to drive itself. Now Harry Potter isn’t the only one to ride in a horseless, coachless carriage. The question now is:  “Who started all this mess, and how will it affect our safety and our pocketbooks?”

A Car Is Born

The driverless car, properly call the autonomous car, began its climb out the thought of man in the mid twentieth century. People envisioned automobiles responding to electronic devices that were previously implanted on the road. By the 1980’s, vehicles were created that could run up to 39 mph, but could not cope with traffic. In 2013, Infiniti released a Q50 that uses multiple types of technology to control the car. It is capable of running multiple miles maintaining its speed and staying in the lines. Google started a driverless car project that has led to the allowance of driverless cars in 4 states: Nevada, Florida, California, and Michigan.

 Insurance Effects 

• According to CBS, a new study shows that self-driving cars, with a saturation of 10 percent would reduce traffic deaths about up to 1,000 per year. Consequently, if 90 percent of all vehicles were autonomous, it would then follow that we could save as many as 21,700 lives per year. Those financial benefits could reach nearly up to $4.5 billion, not counting the added amount of productivity people could enjoy while not driving a car. The only big catch is having enough demand for the supply that will come with the successful invention and implementation of these vehicles. Each car could cost approximately $100,000. Problems could occur when people refuse to have two mortgages — one for a house and one for a car.

• Having a perfect driver would potentially eliminate accidents completely. Robots that can handle a car can also interact with other cars and function without error. Without the interference by humans, animals, or the weather, road travel should be danger free. Without accidents, there is no need for insurance. Car insurance companies would have to lower their premiums to compete, and people who haven’t given up their keys will have extremely cheap auto insurance. It could end up utopia for drivers, and a job search for insurance providers.

If society had 100% safe cars it would eliminate auto insurance altogether, but what about the percentage of people who have the ‘oldies but goodies’. What kind of scenario would take place if an accident happened between a robot car and a human driven car?  Well, it hasn’t happened yet, but based on the simple formula on which insurance companies work, it should be easy to predict. Robot cars, obviously, are not susceptible to driving imperfections, thus the liability would fall on the human driver for negligent driving. The amount of these occurrences should lessen the number of filed claims, but premiums paid by the guilty party may reflect the bombastic cost of fixing or replacing the technology in the new computer driven car.

Direct results can’t be predicted. Whatever happens, the technological improvements of the auto industry in the next 50 years will be exciting, to say the least.

This article was written by Steve Whiley, a blogger in the car insurance industry and a writer for American Auto Insurance.