Auto insurers take many factors into account when pricing a policy for an individual customer. They offer discounts based on how someone drives, the number of policies they have and even good grades for students. But what if the customer has a vehicle with automatic braking or lane centering technology? What if, several years from now, that customer buys a vehicle that is fully automated? Wouldn’t there be less risk of a collision? If that’s true, shouldn’t a discount be in order for reducing the likelihood to file a claim? Further, who is liable in the event an automated vehicle is involved in a collision?

Despite generally low intent to consider purchasing a highly automated vehicle for their next car, customers perceive a wide range of benefits to automation with no one clear standout. According to a recent J.D. Power pulse survey, 60% of customers say there are benefits to owning an automated vehicle. Among the top benefits, more customers perceive value in fewer collisions, reduced stress (which can include a reduced fear of collisions) and improved fuel economy than they do in a lower insurance premium. While “lower insurance premiums” is a listed benefit of owning an automated vehicle, only 18% of consumers say that would play a factor in their decision to purchase one.

Considering both the potential for fewer accidents and the added cost of replacing more advanced features, customers were asked about their expectations on whether automated vehicles would raise, lower or have no effect on their insurance premiums. Only 57% of auto insurance customers say they completely understand their policy; however, customers seem to be somewhat aware of the conflicting forces on insurance premiums. Customers were split nearly evenly on whether premiums would increase (31%), decrease (36%) or stay the same (33%). This may provide some level of comfort for insurers, at least in the short term, while they determine how to underwrite such automated technology. Those figures, paired with 44% of customers saying “fewer accidents” is a benefit of automation and only 25% saying “lower insurance premiums” is a benefit, suggests at least some customers are aware reduced risk of collisions may not always translate into a lower insurance bill.

The real risk to insurers is that while customers may not choose to purchase an automated vehicle to get a discount on their insurance premium, if they had an automated vehicle, they would be likely to switch their insurer to one that offered a discount for automated features. J.D. Power research consistently finds that discounts validating customers’ life choices lead to the highest levels of customer satisfaction, loyalty and advocacy.

That appears to remain true when asking customers the hypothetical question on their intent to switch insurers to receive a discount for purchasing an automated vehicle. Four in 10 customers (40%) say they either “probably will” or “definitely will” switch their insurer to get an automated vehicle discount. That’s significantly higher than the 6% of auto insurance customers considering switching in general. Obviously, cost weighs into the decision process here, but this illustrates a departure from the J.D. Power Auto Insurance Study findings in which 27% of customers say they would not switch insurers for any amount even though shopping rates have reached a new record low in the past five years.

The other major obstacle for insurers is understanding who owns the risk in the event an automated vehicle is involved in a collision. Customers are understandably uncertain about who is at fault in the event of a crash, and the industry is not far ahead of them. Nearly four of 10 (39%) customers would blame the driver for not taking over in the event of a collision, while only 22% say they would blame either the manufacturer of the vehicle or the supplier of the equipment. Nearly one-third (31%) say none of the above, which further underscores the uncertainty in the market.

Today, it seems consumers aren’t quite ready to hand over the wheel and own an automated vehicle, even if they are going to get a lower insurance premium. Insurers are going to have to keep a close eye on customer attitudes toward automation and evaluate the potential to incorporate such features into underwriting policies.

This article has been reprinted with permission from J.D. Power & Associates.

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