Federico Guerrini | Contributor Forbes

Not only, in the age of autonomous vehicles, driving your car could soon become illegal, as Elon Musk recently suggested.

In fact, getting rid of the driver could also have remove the need for private insurances, as all the liability in case of an accident would be transferred to the car’s manufacturer, the software creator, or other third parties. It does make sense, if you think about it for a minute: if you relinquish control over what your car is doing, why should you pay for any misdemeanor?

And it not just common sense: this possibility (purely theoretical, at this point) is outlined in an essay by Yale Law School student Jack Boeglin in the current issue of the Yale Journal of Law & Technology.

“If nondiscretionary-communicative vehicles became mandatory (as the introduction of either the interactive or remote-controlled models might require), there would be no need for private insurance, since all liability for AVs would be transferred to manufacturers,” writes Boeglin, adding that “Eliminating the entire automobile insurance industry (which has roughly $200 billion dollars in annual revenue) would be a monumental boost to administrative efficiency.”

For insurance companies that might be a catastrophe, at least for a while, as they struggle to adjust, but they could soon find other revenue streams, for instance signing deals with the manufacturers.

The chance of having the passengers’ full attention during all the time of the journey, would also create a huge amount of possibilities of monetization for advertisers and content providers.

On the customer’s side, not having to pay for an insurance could prove an irresistible bait for cash-strapped car owners, helping them overcome all their fears related to the further erosion of privacy that could take place if driverless, connected and remotely-controlled vehicles become mainstream.

In Boeglin’s view, freedom, privacy, and liability are not independent elements, but interlocking pieces, that together compose the puzzle of driverless cars’ regulation. It’s like a formula, the final result of which, depends on the weight of each element of the equation.

Do you want more privacy and freedom? You’ll have to pay for it. It’s not an altogether new concept, actually. A number of insurance companies already allow customers to pay less, if the consent to install on their vehicles a ‘black box’ which keeps track of certain parameters, like stopping speed, acceleration, and turning radius. Usage-based insurance programs like Progressive PGR +0.91%Snapshot and Allstate ALL +0.76% Drivewise are good examples of that.

But intelligent cars, with the assistance of 360-degree cameras, could provide much more information: from whether a safe braking distance was observed and the laws of the road were followed, to how smoothly turns were handled.

“These vehicular telematics could also provide a telling comparison between the driving behaviors of the human driver and her automated companion,” Boeglin says.

In other words, they could help estimate the ‘percentage’ of driver’s fault in case of an accident and distribute therefore the liability between the man and the machine. In the case of what the student calls ‘discretionary communicative vehicles’ (those in which the driver can still override autonomous driving) the guilt would be pondered in accordance with the evidence collected by the vehicle’s computer.

In the extreme scenario, in which the human completely relinquishes control to the machine, all the liability would go to the manufacturer.

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