Policyholders could have lower insurance premiums for fleets as autonomous and other intelligent technologies improve and there are fewer accidents, according to a report from Moody’s Investors Service published Wednesday.
“As advanced autonomous vehicles become commonplace, accident rates are likely to drop rapidly over time and could ultimately translate into significantly lower loss costs and premiums for auto insurance companies,” the report on autonomous vehicles says.
“Winters are also likely to decline, as most insurers set profit targets as a percentage of premiums,” it said.
Car liability may also change, the report says. “Regulators, lawmakers and courts must determine how responsibility for accidents caused by autonomous vehicles is shared between automakers, technology companies, drivers and their insurers,”; it said.
“Some, albeit minor, demand for specific auto-related insurance coverage such as product liability for automakers may remain.”
In a separate report on electric vehicles, Moody’s says they are more expensive to repair, and the placement of batteries and electrical cables make them more likely than combustion engine vehicles to be a total loss, even in minor collisions.
As the share of electric vehicles in the fleet increases, “insurers will need to proactively incorporate the changing fleet composition into the liability portion of their rate plans, which cover damage to third-party vehicles,” it said.
The report says electric vehicle fires “are much more difficult to contain than petrol fires” and a greater proportion of these fires occur when a vehicle is parked, “which can damage homes and businesses.
“Insurer regulators and courts will need to figure out who will be liable for these claims,” the report said.