Experts vary as to when the changeover to self-driving cars will occur. A transport scholar at the University of Minnesota believes that by 2030 every car on the road will be driverless. Driverless shuttles are already being tested on some university campuses in Europe.

An automotive study by IHS, a global information company, titled "Emerging Technologies: Autonomous Cars—Not If But When" forecasts that self-driving cars that include driver control will be on highways around the globe before 2025 and self-driving " only" cars by 2030. Nearly all of the vehicles in use are likely to be self-driving cars or self-driving commercial vehicles sometime after 2050, it says. The study notes two major technology risks, software reliability and cyber-security.

We do not yet know how the driving public will react to the vehicles that come on the market. For most drivers there will be a steady progression from a minimally or semi-automated car to the next level. A Status Report from HLDI suggests that it could take as long as three decades for 95% of all registered cars to be equipped with crash avoidance systems. Forward-collision warning systems have been available since 2000, HLDI says, and if they follow their current trajectory, they will not be available in most cars until 2049.

Rinspeed Budii Concept autonomous car based on all-electric BMW i3 presented at the 85th Geneva International Motor Show. Photo of the interior. (Yauhen_D / Shutterstock.com)

In addition, some people who enjoy driving and do not want control to be taken from them may resist the move to complete automation. Already there are some who say they refrain from using the cruise control feature because they prefer to maintain control themselves.

The risk of an accident is unlikely to be completely removed since events are not totally predictable and automated systems can fail. In addition, the transition from hands-off driving to hands-on promises to be tricky.

The need for drivers to control the car in an emergency is fraught with questions, not just those involved in the automotive technology.

• What kind of training will people need to safely handle these semi-autonomous vehicles?
• How well prepared will drivers be to handle emergencies when the technology returns control to the driver?
• How will beginning drivers gain the necessary experience and how will experienced drivers stay sharp enough when they are only infrequently called upon to react?

Autonomous cars have been compared to airplanes on auto-pilot. But while a pilot and a driver both need to be able to make split-second decisions, there are likely to be fewer times when this skill is called upon in a plane than in a car and, in addition, the pilot is highly trained in how to interact with the automated system.

The impact on insurance

Some aspects of insurance will be impacted as autonomous cars become the norm. There will still be a need for liability coverage, but over time the coverage could change, as suggested by the 2014 RAND study on autonomous vehicles, as manufacturers and suppliers and possibly even municipalities are called upon to take responsibility for what went wrong. RAND says that product liability might incorporate the concept of cost benefit analysis to mitigate the cost to manufacturers of claims.

Coverage for physical damage due to a crash and for losses not caused by crashes but by wind, floods and other natural elements and by theft (comprehensive coverage) is less likely to change but may become cheaper if the potentially higher costs to repair or replace damaged vehicles is more than offset by the lower accident frequency rate. The number of vehicle-related workers compensation claims, now responsible for a large but decreasing portion of claim costs according to the National Council on Compensation Insurance, should continue to drop as will the share of healthcare and disability insurance costs related to auto accidents.

Italdesign Giugiaro Gea presented at the 85th Geneva International Motor Show in Palexpo. This concept car imagines luxury driving when no driver is needed. (Yauhen_D / Shutterstock.com)

Regulation: Insurance is state-regulated. Each jurisdiction has its own set of rules and regulations for auto insurance (and so far for self-driving cars). Basically, there are two kinds of liability systems. In some states liability is based on the no-fault concept, where insurers pay the injured party regardless of fault, and in others it is based on the tort system. But there are many important differences among the states in the regulations that now exist within each category, see report on No-Fault Auto Insurance. Will the auto insurance system change to be more uniform with the arrival of self-driving vehicles and will the federal government play a larger role? If car manufacturers are required to accept more responsibility for damage and injuries, they might push for a greater role for the federal government to eliminate some of the cost of complying with the rules of 51 jurisdictions.    

Underwriting: Initially, many of the traditional underwriting criteria, such as the number and kind of accidents an applicant has had, the miles he or she expects to drive and where the car is garaged, will still apply, but the make, model and style of car may assume a greater importance. The implications of where a car is garaged and driven might be different if there are areas set aside, such as dedicated lanes, for automated driving.

During the transition to wholly autonomous driving, insurers may try to rely more on telematics devices, known as "black boxes," that monitor driver activity. Some drivers may object to them based on concerns about privacy. Usage-based insurance policies, which depend on data about the driver's behavior submitted by an electronic device in the driver's car, have attracted a smaller than expected percentage of the driving population, possibly because people do not want to be monitored. According to the National Association of Insurance Commissioners, use of telematics is forecast to grow to up to 20% within the next five years.  

Liability: As cars are become increasingly automated the onus might be on the manufacturer to prove it was not responsible for what happened in the event of a crash. The liability issue may evolve so that lawsuit concerns do not drive manufacturers and their suppliers out of business

RAND has suggested some kind of no-fault auto insurance system. Others foresee something akin to the National Childhood Vaccine Injury Act, a no-fault compensation program for vaccine recipients who suffer a serious adverse reaction when vaccinated. The legislation was passed in 1986 in response to the threat that life-saving vaccines might become scarce or even unavailable if manufacturers, overwhelmed by claims of injury, scaled back or terminated production.

Repair costs: While the number of accidents is expected to drop significantly as more crash avoidance features are incorporated into vehicles, the cost of replacing damaged parts is likely to increase because of the complexity of the components. It is not yet clear whether the reduction in the frequency of crashes will lead to a reduction in the cost of crashes overall.      Automobile ownership appears to be on the decline, and more people in urban areas are opting for public transportation and shared rides. Some people wonder whether when all vehicles are self-driving anyone will actually own a car. Cars may belong to a company, municipality or other group and may be parked away from the center of the community in a location from which they can be summoned by phone.

A study by the University of Texas at Austin of how the advent of autonomous cars may change vehicle ownership found that each shared autonomous vehicle (SAV) replaced about 11 conventional vehicles. The study assumed that only 5% of trips would be made by SAVs.