General Motors, Ford and other established automakers risk becoming relics if they don’t catch up to Chinese carmakers and technology companies in electric vehicles and self-driving cars.
General Motors, Ford and other established automakers risk becoming relics if they don’t catch up to Chinese carmakers and technology companies in electric vehicles and self-driving cars.
Why would the cost of insuring human-driven cars increase? It’s not like the risk of a human drivers will suddenly go up with driverless cars on the road. In fact, driverless cars, if they worked, would lower the claims rate of human-driven cars.
And the insurance companies won’t pressure owners to switch to driverless vehicles. True self-driving vehicles won’t require insurance at all. If the manufacturer is completely responsible for any risk, then it’s the manufacturer that has all the liability. Your self-driving car would just have a lifetime worth of insurance coverage built into the purchase price. A world of only self driving cars is a world where car insurance companies don’t exist.
Because humans are terrible drivers and would be responsible for the vast majority of crashes. And the fact that self driving cars don’t need insurance would drive up the costs since the premium pool would be much smaller.
That makes zero mathematical sense.
It does if you understand how insurance works.
The insurance companies pool all of the premiums they receive and pay claims out of that. The more people paying into the pool, the lower the financial burden of a single payout.
With auto insurance specifically, everyone with a different insurance company paying into that company’s pool is further mitigating the risk.
If self driving cars aren’t required to carry insurance, then the number of people paying into the pool is going to shrink but the total cars on the road won’t at the same rate.
Since fully autonomous vehicles are going to be way more expensive than manually driven vehicles, the premiums will need to rise dramatically.
There’s a limit to the gains from pooling insurance risk. Sure, you gain a lot by going from 1000 people in a pool fo 10000. But 10 million to 20 million? You reach a point where the law of large numbers takes over and adding more people doesn’t produce further gains.
But decreasing the pool will decrease your gains. Self driving cars would greatly decrease the pool while also greatly raising the risk.
Are you familiar with what an asymptote is?