Driverless Cars Threaten to Crash Insurers’ Earnings • Hacker News Board

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#51

Post by seizethecheese » Tue, Jul 26, 2016, 6:09 PM UTC

ryandrake wrote: post #38

paulmd wrote: post #9

The other bubble that driverless cars are going to pop is ticket revenue. There are a lot of police departments and cities who have structured a lot of their budget on heavy-handed enforcement of motorists. That's going to decline significantly once driverless cars are scrupulously following the rules of the road. And any tickets that get written will be going against a giant corporation like Google, with detailed in…

What makes you think Google will fight my ticket on my behalf? Surely, it would benefit them to have traffic laws written to clarify that the occupant is still liable for any laws his self-driving car breaks. Also, as the other commenter said, the laws will adapt. The purpose of traffic laws is to maintain $X level of revenue, so if revenue starts to drop, local governments will increase the number and complexity of…

The end state for driverless cars is most likely not individual ownership. Large companies will probably own fleets of cars available for hail. In this world, the fleet owners would probably develop a rigorous process to cost effectively fight traffic tickets.

Even if local governments tried to increase the complexity of traffic laws, the fleet owners would increase spending on fighting tickets; this would result in an arms race which would be costly for the local government. It's much easier to extract rent from the little guys.

The worry I have is of increased enforcement of local non-traffic laws to make up revenue.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#52

Post by tomjen3 » Tue, Jul 26, 2016, 6:10 PM UTC

tw04 wrote: post #3

Why would they lower prices? The government mandates we MUST have insurance, so they know they've got a continued source of business. They'll simply increase profits. The average American has absolutely no way to correlate the amount they pay for insurance to what it costs the insurance company.

The I will buy 1 usd nominal insurance from my car manufacturer along with buying the car. Or more likely get it for free with my accident and theft insurance.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#53

Post by shimon » Tue, Jul 26, 2016, 6:10 PM UTC

squozzer wrote: post #16

Not sure how it would affect prices, but if driverless cars (let's call them autopilot-mobiles) take over the world, they may not be owned by individuals anyway, but instead bought as-needed from corporations (e.g. "Just $100 a month for the Commuter Plan".) This would shift insurance industry focus from insuring millions of individuals to thousands (or maybe only dozens) of corporations, so they could also save mone…

And if it is dozens of corporations, there's no reason they wouldn't just absorb the insurance function. Right now because insurance is bought by consumers there's tremendous value in having a recognizable consumer-facing brand (Gecko & Flo). But if the car provider already has the ongoing consumer relationship, offering the insurance is a straightforward financial feature. Plus they'll be way more informed about the risk characteristics of their customers and vehicles. I don't see any remaining reason for separate auto insurance companies to exist if this version of car purchasing takes over individual ownership.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#54

Post by cmdrfred » Tue, Jul 26, 2016, 6:12 PM UTC

dsfyu404ed wrote: post #50

cmdrfred wrote: post #46

Earlier quoted context omitted.

Exactly, and keep in mind many states have moved to a 'no-fault' model. So they don't actually care who is at fault for the accident anymore. So the question becomes, why doesn't everyone just insure themselves (IE. Their own car/medical bills to the level they are comfortable with) rather than insuring everyone else and praying the guy that hit you does the same.

Affordable and accessible medical care is a prerequisite to that. After the injury aspect is taken out of the picture then it would make sense for everyone to insure as much as they want (e.g. homeowners insurance)

If I don't want to be insured for own personal bodily injury, why should I be forced to buy that product in a free market? What if the premium simply isn't cost effective? By forcing anyone to buy a product you are creating a captive market and thus insane prices. Especially when the businesses involved are explicitly allowed to collude[0]. Sounds like a bad deal for everyone but the insurance companies.

[0]https://en.wikipedia.org/wiki/McCarran%E2%80%93Ferguson_Act

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#55

Post by dragonwriter » Tue, Jul 26, 2016, 6:14 PM UTC

dsfyu404ed wrote: post #49

undersuit wrote: post #27

Earlier quoted context omitted.

Free Market is the US does not contain a well-informed consumer segment. That is the issue of the second sentence. >N.b. Personally, I am much happier knowing that (almost) all the people potentially plowing into me on the highway carry insurance. Do you live in the US? Where 1 in 7 drivers are uninsured?

Citation on the 1 in 7? That sounds like it comes from the same people who make any speeding offense on par with DUI and having an at fault accident in most points based systems. One in seven people with a license not having insurance I can see (because they might not have a vehicle) but one in seven vehicle/driver pairs on the road not being insured for that combination seems very high without monkeying around with…

It actually sounds like a somewhat outdated (the trend is down and the most recent figure I can find is about 1 in 8 [0], rather than 1 in 7) figure derived from insurance claims (which may systematically misstate the share of drivers or driver/vehicle pairs, but probably is reasonably accurate in determining what people actually care about -- if I need to go after someone for damages resulting from an accident, will they have insurance? -- except to the extent that insured drivers are more or less likely to be in an accident with an uninsured driver vs. an insured driver, all other things being equal.)

[0] http://www.iii.org/fact-statistic/uninsured-motorists

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#56

Post by tomjen3 » Tue, Jul 26, 2016, 6:17 PM UTC

Artlav wrote: post #6

Correct me if i'm wrong, but wasn't "insurance" a criminal activity a mere century ago? If so, why is it bad for it to disappear again? Can't read the full article, since wsj have a competently implemented "To Read the Full Story, Subscribe or Sign In" shield.

Insurance markets are almost twice the age of the US. You can't have a huge merchant fleet without insurance, since it would be too risky to sail.

What you may have refered to is a particular ruling that insurance contracts are not commercial contracts, but that has been overturned.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#57

Post by ryandrake » Tue, Jul 26, 2016, 6:17 PM UTC

seizethecheese wrote: post #51

ryandrake wrote: post #38

Earlier quoted context omitted.

What makes you think Google will fight my ticket on my behalf? Surely, it would benefit them to have traffic laws written to clarify that the occupant is still liable for any laws his self-driving car breaks. Also, as the other commenter said, the laws will adapt. The purpose of traffic laws is to maintain $X level of revenue, so if revenue starts to drop, local governments will increase the number and complexity of…

The end state for driverless cars is most likely not individual ownership. Large companies will probably own fleets of cars available for hail. In this world, the fleet owners would probably develop a rigorous process to cost effectively fight traffic tickets. Even if local governments tried to increase the complexity of traffic laws, the fleet owners would increase spending on fighting tickets; this would result in…

I'd expect it would be cheaper in the long run for those large companies to influence laws to move ticket liability over to their customers rather than take on the expense of fighting traffic tickets themselves.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#58

Post by dexwiz » Tue, Jul 26, 2016, 6:18 PM UTC

paulmd wrote: post #37

dexwiz wrote: post #28

Earlier quoted context omitted.

Traffic laws are notoriously regional in the United States. The fines will adapt. There some potential infractions. Such as keeping your car in a minimum condition. Or having legacy system support. It needs to get patches to update to newer network types. Completely unattended driving (enter destination and taking a nap) is still up for debate. Requiring a machine to be watched seems like a pretty easy-to-pass regula…

This is purely opinion-based, but I think the problem is primarily local/city-level. That's where most of the current problem with ticket farming happens, and once driverless cars are commercially available I think it will be relatively unpalatable to ban them at a state level or higher.

You can pass traffic laws that target driverless cars without outright banning them. The cronies at a local/city-level that pass laws to turn traffic into a source of income have friends in state and federal. Or move to the state/federal level. Is the Federal government immune from passing similar laws?

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#59

Post by seizethecheese » Tue, Jul 26, 2016, 6:20 PM UTC

ryandrake wrote: post #57

seizethecheese wrote: post #51

Earlier quoted context omitted.

The end state for driverless cars is most likely not individual ownership. Large companies will probably own fleets of cars available for hail. In this world, the fleet owners would probably develop a rigorous process to cost effectively fight traffic tickets. Even if local governments tried to increase the complexity of traffic laws, the fleet owners would increase spending on fighting tickets; this would result in…

I'd expect it would be cheaper in the long run for those large companies to influence laws to move ticket liability over to their customers rather than take on the expense of fighting traffic tickets themselves.

Possibly, but that's assuming no aspect of consumer choice in the survival of ride hailing systems. If customers had to worry about tickets, they would quickly migrate to a competitor which assumed liability.

Re: Driverless Cars Threaten to Crash Insurers’ Earnings

#60

Post by dexwiz » Tue, Jul 26, 2016, 6:24 PM UTC

JoshTriplett wrote: post #35

dexwiz wrote: post #28

Earlier quoted context omitted.

Traffic laws are notoriously regional in the United States. The fines will adapt. There some potential infractions. Such as keeping your car in a minimum condition. Or having legacy system support. It needs to get patches to update to newer network types. Completely unattended driving (enter destination and taking a nap) is still up for debate. Requiring a machine to be watched seems like a pretty easy-to-pass regula…

> Completely unattended driving (enter destination and taking a nap) is still up for debate. Requiring a machine to be watched seems like a pretty easy-to-pass regulation. Requiring a human to watch implies a means for the human to intervene and take over. Having a human second-guess the machine will increase accidents. And having the controls available for the human to do so will increase complexity and decrease rel…

Many regulations are of questionable validity, but do you really want to be in a machine that you have no control over? Would robotic drivers be better at things like merging, keeping distance, not over correcting? Yes. But people will still want to intervene when it doing something dumb like driving into a pond, or gets stuck on a median and cannot figure out how to get off.

Driverless cars will probably not be magic pods that whisk you around. It's still a vehicle that needs to navigate terrain. And roads are not perfect everywhere.