Driving the news: Bank of America thinks self-driving cars could actually make auto insurers more money, not less, by dumping liability onto tech companies and carmakers instead of individual drivers.
For context: Right now, drivers are on the hook when accidents happen, but with autonomous vehicles there's no driver to blame. So, liability shifts to whoever made the car or software.
BofA analysts led by Joshua Shanker wrote in a note that this development removes an "impediment to insurer profitability" since insurers typically lose money on liability coverage anyway, reports Bloomberg.
The analysts also push back on the idea that fewer crashes will hurt profits, pointing out that accidents are getting more expensive even if they're less frequent.
Why it matters: Everyone assumes self-driving cars will be bad news for insurance companies because there will be fewer accidents to insure against. But BofA sees it differently. Insurers could end up processing claims and collecting fees while tech companies and automakers get stuck with the actual bills.
Bottom line: If BofA is right, autonomous vehicles could be the best thing that ever happened to auto insurers.
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