Self-driving cars could make personal auto insurance largely obsolete within 20 years, according to a worst-case scenario modeled by Morningstar. A more likely, moderate scenario forecasts the line could remain necessary for a few more decades, until 2060.
The firm’s new report, “Insuring Autonomy: Analyzing the Implications of Self-Driving Cars for the Auto Insurance Industry,” finds that by 2044, in the most aggressive adoption scenario, most cars on the road could be automated to a level where liability shifts from driver to manufacturer. Morningstar believes that wide adoption of autonomous vehicles likely means that car insurance would be replaced by product liability insurance, which would ultimately be borne by the auto manufacturers when Level 4 or 5 autonomy is achieved.
This transition could be the end of the line for insurers that rely too heavily on personal auto premiums, Morningstar warned, highlighting Progr