Driverless cars are becoming a reality—and their impact oninsurance may be even greater than the Affordable Care Act, saysValerie Raburn, vice president and chief innovation officer for theinsurance division of Xerox.

Looking roughly 15 years into the future—when experts saydriverless vehicles will be sold for commercial use—Raburn sees aworld in which elderly baby boomers and driving-averse millennialsrely on driverless vehicles for transportation.

As production costs come down, more people will embrace thesevehicles, either purchasing them or booking them on a per-usebasis. Raburn envisions busy families who need to get to variousschools and workplaces booking multiple driverless vehicles to takeeach of them to their destinations, with the vehicles thenreturning themselves to a “staging area.”

With the responsibility (and liability) of driving out of ourhands, auto and parts manufacturers and suppliers will bear thebrunt of potential liability—and the cost of risk mitigation,whether it's through product liability insurance or self-insurancemechanisms.

Assuming that 25% of an auto premium is for comprehensivecoverage and 75% for liability and collision, eliminating that 75%will deal the auto insurance industry a crippling blow, Raburnsays.

Among her predictions: Insurers' primary revenue streams willshift from personal lines to commercial lines, as carriers retooltheir offerings to sell product liability insurance to vehiclemanufacturers. The concept of “distracted driver” will cease toexist, which means fewer accidents and consequently lower insurancerates. Vehicle owners will no longer buy collision insurance asmanufacturers will be solely responsible for damage.

The technological underpinnings of usage-based insurance willtransition away from consumers and personal auto insurers andbecome a valuable tool for both automakers and their productliability carriers. And finally, no-fault regulations will bereplaced by tort-based product liability laws.

But self-described “futurist” Keith Savino, COO of WarwickResource Group LLC and an active member of many industry technologygroups, thinks there's more to the story—starting with thedefinition of “driverless.”

Such vehicles could range from 100% driverless, in which thevehicle is essentially a chauffeur, to systems in which the drivercan relinquish control at will, when he's tired, needs tomultitask, or wants to avoid driving drunk.

Driverless vehicle technology will come about gradually. Infact, pieces are already present in higher-end vehicles in the formof lane avoidance, backup warning and other sensor systems. “It'san evolutionary path, and we have to consider what the insuranceindustry will do at each point alone that path,” Savino says.

And we've been down this path before. Airbags, anti-lock brakesand seat belts have improved safety, but until every vehicle on theroad is truly driverless, negligence will always be an issue.

And Savino doesn't think people will ever give up drivingaltogether. He recalls the joy of driving captured by “RedBarchetta,” a 1981 Rush song depicting a dystopian future where ayoung lad breaks the “Motor Law” and evades the authorities byroaring across the countryside in his uncle's illicit redBarchetta, “from a better, vanished time.”

Even if the future shakes out as grimly as Rush depicted it,Savino expects one thing to remain the same: “If agents and brokerscan explain things to their clients, they will still be animportant part of the personal lines landscape.”