Food for Thought: Autonomous Vehicles and Insurance. How will it work?

Updated: Apr 19, 2020



It's hard not to notice the attention that autonomous vehicles have been receiving in the media. The technologies around autonomous vehicles are speeding up in their lifecycles and releases, and these technologies may be arriving in our driveways sooner than later.


Additionally, technology companies are developing an even greater appetite for hiring technologists in the artificial intelligence and autonomous vehicle arena. Since this seems to be the "next big thing", all of this strategic hiring makes sense.


But what about insuring an autonomous vehicle? Who will be insured? How will it work? What will it cost? So many questions come up when considering vehicles as autonomous endpoints.


Who would be the insured?


For the most part, the current approach effectively binds insurance to the driver of a vehicle. Safe drivers with a safe driving history are rewarded with better rates. But what happens when the software becomes the "driver" of the vehicle? How will insurance pricing and assessments work?


Technology and automotive titans are already preparing.


If we take a quick look, we find several examples of activity that may help position businesses for higher levels of success in this space.



Is it safe to assume that more collisions will be caused by software malfunction as opposed to human error? Will there still be a need to insure the owner of an autonomous vehicle?


As a result, many claims may involve lawsuits and disputes between car insurance companies and vehicle manufacturers, which would undoubtedly result in significant delays in resolving claims. In contemplation of the impact autonomous vehicles will have on our roads, the Insurance Bureau of Canada has recommended the following 3 major changes:

1. Insurance Companies need to provide a single insurance policy that covers both driver negligence as well as the vehicle's automated technology

2. There should be a data-sharing arrangement between vehicle manufacturer's vehicle owners and insurers and

3. New federal vehicle standards for vehicle technology and cyber security should be developed.


With all the benefits and features that software will bring to the table, it will be interesting to see how insurers and insurance fits into the puzzle of autonomous vehicles.




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