The auto insurance market is one of the most exciting segments of the insurance sector, but based on current developments in the automobile industry, this could soon change.

Advances in technology have created an environment where innovation is the main disruptive force. Whether you are in the smartphone business or the computing industry, the quality of devices being produced appears to be the main determinant of success or failure in a highly competitive market.

This concept has spread to other sectors, including the automobile industry, with tech-featured vehicles commanding higher profit margins than their traditional counterparts. Most cars today have one or two autonomous features, including cruise control and auto backing.

Some vehicles even have autopilot capabilities, meaning the driver can choose to let the self-driving system take control. These features are a massive leap in the automobile industry, but their effects are not limited to “taking control.”

The auto insurance industry is one of the biggest victims of this paradigm shift. The more autonomous vehicles produced, the higher the impact. The industry relies on premiums paid by motorists and, according to research, insurance against human error seems to be the industry’s cash cow. Reports indicate 90% of all car accidents are caused by human error.

A shift into self-driving cars will not only cause a disruption in the way auto insurance companies estimate their premiums, but also in the way motorists identify the best insurance plans for their vehicles. As such, getting a better deal on car insurance will become a complex checklist of what a motorist should cover and what the car manufacturer should insure.

Self-driving cars could reduce this risk to minimal levels, thereby affecting the quality of premiums paid toward this coverage. This means the auto insurance industry will need to reinvent itself to keep afloat in the future.

Reports suggest the data these companies collect could be handy in the long run by providing autonomous vehicles with statistics of the most accident-prone roads, but it remains to be seen how effective this will be.

On a positive note, it could take a while before a huge chunk of the cars on the road are autonomous. In addition, since the risk of causing an accident will now transfer to the self-driving system, it means the manufacturers of these autonomous vehicles will have to buy insurance for the same. As such, this could create a new revenue stream for the auto insurance industry as the transition to self-driving cars takes effect.

Some autonomous car manufacturers have already embraced this change with the likes of Tesla ( TSLA ) already beginning to factor in the cost of insurance when pricing their cars. On the other hand, Volvo ( VLVLY ) has expressed optimism in its self-driving system by getting insurance for its autonomous vehicles. According to reports, “Volvo is already on board with this approach and is so confident in its technology that CEO Hakan Samuelsson plans to accept liability for its driverless cars when in autonomous mode.”

Car owners may also have to insure against cyber hacking. According to reports, the self-driving system is susceptible to hacking, creating another risk auto insurers can take advantage of. Charlie Miller, Uber’s former top hacker, revealed securing autonomous vehicles against hacking is a very tough job, raising the bar for manufacturers to increase security features.

If the developers of these systems were able to reduce the risk threshold significantly as Volvo claims to have done, then auto insurance premiums would decline substantially. This is the uncertain future that awaits the auto insurance industry as more automobile manufacturers continue to run pilot projects for autonomous vehicles.

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