It goes without saying that when self-driving vehicles dominate the world’s roads, automobile insurance will be different than it is today. Firstly, human error will be eliminated, causing a dramatic drop in the number of collisions that occur each year. As a consequence, the cost of insurance should go down. But robocars may change the insurance industry in other ways as well.
It’s possible that someday when you Google “auto insurance carrier,” the top item returned will be, well, Google. According to Valerie Raburn, chief innovation officer of insurance services at Xerox, Google is poised to take over the insurance market. Writing in the Wall Street Journal, Raburn reports that the search giant-cum-automated vehicle industry frontrunner has styled itself as an aggregator of auto insurance quotes. Its Google Compare unit, which has been in operation in the United Kingdom since 2012, gathers quotes from carriers so shoppers can compare rates and policy coverages side by side. Google not only collects a fee each time a user on the site buys one of the policies about which it delivers information, but the company also gains a wealth of information on how risk is priced in the competitive market. This, says Raburn, “could allow the company to insure tomorrow’s vehicles, or simply roll the cost of insurance into the retail price of Google’s own driverless car once it hits the market.”
So it’s possible that auto insurance, as we know it, will cease to exist. If, in the distant future, all cars drive themselves, fault won’t be an issue. Raburn envisions self-driving cars being covered by something akin to the general product liability insurance that now covers your toaster, refrigerator, or coffee maker. And Google, having accounted for the cost of that insurance when it sets its cars’ retail prices, could effectively push today’s carriers out of the market.
In March, the company brought Google Compare to the United States; the site, now available for drivers in California, brings up quotes from about a dozen carriers, including MetLife and Mercury Insurance. As the testing of self-driving cars on U.S. roads—and in specially-built testing grounds, such as Mcity, the 13-hectare simulated municipality on the Ann Arbor campus of the University of Michigan—brings us closer to the day when humans’ role in the driving experience is limited to telling vehicles where to go, Google is positioning itself to control what happens on the rare occasions that robocars crash.
Willie Jones is an associate editor at IEEE Spectrum. In addition to editing and planning daily coverage, he manages several of Spectrum's newsletters and contributes regularly to the monthly Big Picture section that appears in the print edition.