In October 2014, Elon Musk unveiled Tesla’s Model D, marking a significant leap forward in the development of autonomous and self-driving cars. Since then, we’ve seen a rapid rise in autonomous vehicle (AV) technology from companies like Tesla, Google, and other automakers. With the introduction of smarter cars, there’s a mix of excitement and concern as we look at the future these vehicles will bring. It’s clear that self-driving cars are a game-changer across multiple industries, but for personal injury attorneys and insurance companies, they could spell significant challenges.
Here are five key reasons why personal injury attorneys and insurers should take note of the growing impact of autonomous vehicles.
1. Fewer Accidents
As Chunka Mui pointed out in his Forbes series on driverless cars, human error is responsible for between 77% and 90% of motor vehicle accidents (MVAs). In 2009, for instance, the U.S. experienced 5.5 million MVAs, resulting in over 33,000 deaths and more than 2.2 million injuries. Fast forward to 2022, and the National Highway Traffic Safety Administration (NHTSA) reported 6.7 million police-reported crashes, with over 42,000 fatalities. While accident rates haven’t changed dramatically, autonomous technology promises to drastically reduce these numbers.
Google, which has been developing self-driving cars for years, aims to reduce motor vehicle accidents by 90% annually. However, a car doesn’t need to be fully autonomous to help avoid accidents. Many automakers, particularly in the luxury vehicle market, are already incorporating intelligent accident-avoidance and crash-monitoring technology into their vehicles. Volvo, for instance, predicts that its cars will be nearly crash-proof by 2030, pushing back from an original 2020 target but staying committed to the cause. As this technology continues to develop and gain consumer trust, it is expected to become widely adopted, resulting in far fewer accidents.
What this means: With fewer accidents, the demand for personal injury attorneys specializing in car crashes could take a significant hit, reducing their caseloads.
2. Fewer Hospitalizations
Fewer accidents naturally lead to fewer hospitalizations. Mui estimates that the adoption of autonomous vehicles could reduce the number of emergency room visits by millions each year, with hospitals seeing hundreds of thousands fewer patients needing overnight stays. Motor vehicle accidents cost the U.S. economy at least $500 billion annually in medical expenses, lost productivity, and property damage. By reducing accidents, autonomous vehicle technology could save the economy around $400 billion annually, according to Google’s predictions.
What this means: As accidents decrease, personal injury claims related to medical expenses will also decline, affecting not just personal injury attorneys but health insurers as well, who may see reduced revenue from accident-related health claims.
3. Increased Transparency in Accident Cases
Today’s autonomous vehicles are equipped with crash-monitoring technology, such as the systems found in Volvo’s vehicles, which means there is far more transparency in motor vehicle accidents than ever before. Cameras, sensors, and onboard computer systems can pinpoint exactly what happened leading up to a crash, making it much easier to assign blame.
For insurers and personal injury attorneys, this increased transparency could be a game-changer. Insurance fraud, for example, could become a thing of the past, as the technology would make it nearly impossible to falsify details of an accident. This could also signal the end of low-ball insurance settlements, as the evidence provided by the vehicle’s crash-monitoring system would provide clear data on what occurred. According to Mui, the technology could greatly reduce the number of “gray areas” that often require the involvement of personal injury lawyers.
What this means: For personal injury attorneys, fewer contested cases and clear evidence of liability could reduce the need for legal involvement in accident cases, meaning fewer opportunities to advocate for clients.
4. Fewer Personal Injury Claims
With fewer accidents and hospitalizations, it’s no surprise that the number of personal injury claims would also decline. As Mui predicts, the proliferation of autonomous vehicles could cause car-related personal injury cases to all but disappear. While this may not be devastating for attorneys who handle a wide variety of cases, it could have a significant impact on those whose practice focuses heavily on personal injury related to motor vehicle accidents.
Insurers, meanwhile, will face a different challenge. Initially, they might see an uptick in profits as accidents decline and payouts to customers drop. However, as autonomous vehicles become more widespread, they could experience a dramatic reduction in premiums collected. The U.S. auto insurance industry, which collects more than $300 billion annually in personal auto premiums, could see as much as 90% of these premiums disappear over time.
Even a 25% adoption of incremental AV technologies — such as smart cruise control and crash-avoidance systems — could have a significant impact. With less congestion and fewer accidents, insurers could see their market diminish long before fully autonomous vehicles dominate the roadways.
What this means: Both personal injury attorneys and insurers must prepare for the inevitable reduction in claims. For insurers, especially, the need to adapt their business models will be crucial to survival.
5. The End of Personal Auto Insurance?
For decades, insurers have invested heavily in their ability to assess individual risk and price accordingly. However, as Mui points out, the rise of intelligent driving technology will diminish the importance of underwriting based on human error. Insurance companies will be forced to change their business models to stay competitive, or risk being left behind by tech-savvy startups aiming to disrupt the industry.
It’s not just auto insurers who stand to suffer. Health insurers may see billions in lost revenue as the number of accident-related hospitalizations decreases. Meanwhile, attorneys who continue to handle personal injury cases will likely see the value of these cases diminish as accidents become less frequent.
What this means: Insurers will need to evolve their offerings to focus on new areas, such as commercial autonomous fleets, technology failures, and cyber risks, while personal injury attorneys may need to diversify their practices to include other areas of law.
The rise of autonomous vehicles brings both challenges and opportunities. While personal injury attorneys and insurers face significant disruptions, consumers stand to benefit from safer roads, fewer accidents, and lower insurance premiums. Autonomous vehicles are reshaping the future, and those in the legal and insurance industries must adapt to remain relevant in this rapidly changing landscape.
