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Bloomberg NEF on how driverless cars will change insurance

Some experts have made dire predictions about the auto insurance industry’s survival in the age of driverless cars. For example, a 2016 Morgan Stanley report called, “Are Auto Insurers on the Road to Nowhere,” estimates that the industry will shrink to about 20 percent of its current size by 2040. However, Illinois residents should be aware of newer research, which does not seem to point to such a sudden decline.

Bloomberg New Energy Finance has issued a report stating that driverless cars will create a gradual shift in the types of insurance products that will be offered. It expects that most drivers will begin by using autonomous features only part of the time, such as when parking or when stuck in traffic; companies could take advantage of this situation by offering policies for both drivers and vehicles.

When driverless cars become the norm, policies for individual drivers may become unnecessary, but new sources of revenue will inevitably open up, the report continues. Since the sensors, cameras and other automated technology are costly, manufacturers and tech companies will likely want coverage. Insurers could even start providing cyber insurance to protect cars against hacking.

The transition can be difficult for some insurers that do not cover both drivers and vehicles. However, the recent spate of accidents involving semi-autonomous vehicles shows that the industry will not disappear.

New technology has been linked to more than a few cases of driver negligence. Those who are involved in an accident because of a negligent driver can file a claim against that driver’s auto insurance company but may benefit from hiring a lawyer beforehand. Once the police report and other proof have been assembled, the lawyer might decide to proceed to negotiations. If successful, the victim may receive compensation for medical bills, vehicle damage, lost wages and more.