In their investigation of the potential impact that the introduction of autonomous vehicles (AVs) could have on automobile insurance in the United States, researchers found that the existing U.S. auto insurance system should be sufficiently flexible to accommodate the initial introduction of AVs, particularly for operators of AV fleets. Consumer acceptance of AVs will be an important factor for new or adaptive automobile insurance frameworks.

Autonomous Vehicles and the Future of Auto Insurance

Karlyn D. Stanley, Michelle Grisé, James M. Anderson

ResearchPublished Dec 17, 2020

To investigate the impact that the widespread deployment of autonomous vehicles (AVs) could have on automobile insurance in the United States, RAND Corporation researchers interviewed 43 subject-matter experts from 35 stakeholder organizations and conducted an extensive literature review. A key finding from their research is that the existing automobile insurance system in the United States should be sufficiently flexible to accommodate the introduction of AVs. Experts generally agreed that, although some changes to the U.S. auto insurance model may be indicated as vehicles incorporate higher levels of automation, it is too early to make radical changes to the U.S. automobile insurance system. In addition, a majority of experts predicted that AVs would be deployed in a fleet ownership model, although their predictions regarding the specific formulation of fleet ownership differed. A majority of experts also said that the automobile insurance claims process for accidents involving AVs and conventional cars would not change significantly in the future, and experts agreed that consumer acceptance was very important to the successful deployment of AVs.

In addition, the authors explored experts' assessments of the benefits and drawbacks of proposed future insurance models for AVs, such as statutory no-fault compensation schemes, current no-fault insurance models used in some U.S. states, fleet insurance, and manufacturer self-insurance. They also interviewed experts in the United Kingdom, Australia, Japan, and Canada about how those countries were adapting their insurance frameworks to incorporate AVs and ensure the compensation of those injured in accidents.

Key Findings

The existing auto insurance system in the United States should be sufficiently flexible to accommodate the introduction of autonomous vehicles (AVs)

  • Most experts agreed that, although some changes to the U.S. auto insurance model may be indicated as vehicles incorporate higher levels of automation, it is too early to make radical changes to the U.S. automobile insurance system.
  • A majority of experts predicted that AVs would be deployed in a fleet ownership model, although their predictions regarding the specific formulation of fleet ownership differed.
  • A majority of experts said that the insurance claims process for accidents involving AVs and conventional cars would not change significantly in the future.
  • Experts agreed that consumer acceptance was very important to the successful deployment of AVs.

Recommendations

  • Insurers, manufacturers, and other stakeholders should collaborate to develop a framework for collecting and sharing AV data. Further research to explore methods for information-sharing between insurers and manufacturers could assist the automobile insurance industry in more accurately assessing risk, paying claims, creating new insurance products, and facilitating the adoption of AVs.
  • In adapting existing insurance frameworks to accommodate the deployment of AVs, policymakers and insurers in the United States should consider international insurance frameworks. Policymakers in other countries must also contend with the liability and regulatory implications of the deployment of AVs. Policymakers and insurers in the United States should closely examine these international models, which could provide novel solutions to common liability, coverage, and other issues associated with AVs.
  • Further research to understand the fleet operator model's effects on consumer acceptance would be useful. Insurance coverage for AVs will play a significant role in increasing consumer confidence in these new technologies. Consumer acceptance of AVs will be an important factor in setting the pace for creation of new or adaptive automobile insurance frameworks.

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Stanley, Karlyn D., Michelle Grisé, and James M. Anderson, Autonomous Vehicles and the Future of Auto Insurance. Santa Monica, CA: RAND Corporation, 2020. https://www.rand.org/pubs/research_reports/RRA878-1.html.
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