alt Hacker News> if autonomous vehicles become common and are a lot safer than manual driven vehicles, insurance rates for human driven cars could wind up exploding as the risk pool becomes much smaller and statistically riskier.
The assumption there is that the remaining human drivers would be the higher risk ones, but why would that be the case?
One of the primary movers of high risk driving is that someone goes to the bar, has too many drinks, then needs both themselves and their car to get home. Autonomous vehicles can obviously improve this by getting them home in their car without them driving it, but if they do, the risk profile of the remaining human drivers improves. At worst they're less likely to be hit by a drunk driver, at best the drunk drivers are the early adopters of autonomous vehicles and opt themselves out of the human drivers pool.
Drunk driving isn't the primary mover of high risk driving. Rather you have:
1. People who can't afford self driving cars (now the insurance industry has a good proxy for income that they couldn't tap into before)
2. Enthusiasts who like driving their cars (cruisers, racers, Helcat revving, people who like doing donuts, etc...)
3. Older people who don't trust technology.
None of those are good risk pools to be in. Also, if self driving cars go mainstream, they are bound to include the safest drivers overnight, so whatever accidents/crashes happen afterwards are covered by a much smaller and "active" risk pool. Oh, and those self driving cars are expensive:
* If you hit one and are at fault, you might pay out 1-200k, most states only require 25k-50k of coverage...so you need more coverage or expect to pay more for incident.
* Self driving cars have a lot of sensors/recorders. While this could work to your advantage (proving that you aren't at fault), it often isn't (they have evidence that you were at fault). Whereas before fault might have been much more hazy (both at fault, or both no fault).
The biggest factor comes if self driving cars really are much safer than human drivers. They will basically disappear from the insurance market, or somehow be covered by product liability instead of insurance...and the remaining drivers will be in a pool of the remaining accidents that they will have to cover on their own.