10 Surprising Ways that Car Insurance Will Change in the Next 20 Years
If you’re getting tired of the routine shopping for car insurance, then you might be interested to learn how experts predict the future of car insurance is going to change. From robot cars to robot policemen, technology is even now changing the face of how we buy car insurance . . .
1. Driverless Cars
Driverless cars have been in the news a lot recently, and the advent of a car that’s controlled by a machine rather than a person is set to change auto insurance. Experts are divided on whether driverless cars will mean that we won’t need insurance at all since they’ll be so safe, or whether insurance payments will drop to a minimum.
Telematics is the word for systems that track the behaviour of drivers, in a similar way that black boxes track pilot behaviour. By recording information from the vehicle and accurately reporting speed and acceleration at the time of an accident, telematics can effectively prevent false claims on insurance, and therefore drive down insurance premiums.
3. Robot Policemen
The use of machines to gather information on roads isn’t a new one. But with more and more communities using cameras at lights and speed cameras, it’s becoming easier to track and log driver behaviour. This means that insurance companies will in the future have information about your driving skills, and will be able to charge you a more accurate, personalised fee for your insurance.
4. Collision Avoidance
As more and more cars come equipped with collision avoidance features (think of the beeper that sounds when you reverse too close to something), accidental collisions with stationary objects are becoming less frequent. This means lower insurance prices in the future, as insurance companies are paying out less money.
5. You Pay for How You Drive
Similar to telematics, there is a pilot project underway in Spain right now that tracks drivers habits, how far they drive, whether it’s during daylight or not, their braking speeds et cetera. This info is given to the driver’s insurance company, which then determines his premium based on his skills. Expect this to become commonplace.
6. Being Rewarded for Not Driving
As it becomes easier for insurance companies to track your driving behaviour, expect to start being rewarded for deliberately avoiding certain driving conditions. Premium prices can be discounted in exchange for a driver agreeing not to drive at night, during rush hour, or during certain weather conditions.
This is already happening, more and more drivers are buying insurance online, to take advantage of comparison websites to get the best deals. In twenty years time expect the insurance agent to be defunct, we’re all going to be shopping online anyway.
8. Pay as You Go
This programme is already being trialled in some states in the US. Basically, you pay an insurance rate per mile that you drive, rather than a fixed monthly or yearly rate. You pay only for insurance while you’re actually driving, and pay nothing while your car is sitting in your driveway. Expect this to become more popular as insurance competition heats up.
9. More Choice, But Fewer Companies
As safety improves, and insurance companies are forced to lower premiums, expect the market to narrow to only a few big companies, as the little guys go out of business. However, those companies will be forced to offer a wider range of flexible insurance plans to meet consumer demand.
10. No Insurance?
As safety records continue to improve, and driverless cars seem more and more possible, some experts predict the end of car insurance companies altogether. It’s a stretch that it could happen in twenty years, but anything’s possible.