The thought of cars driving around our streets with no human interaction is no longer the stuff of science fiction ..... it’s here.
In the 2017 Autumn Budget the government announced that it would increase its support and funding for driverless or autonomous vehicles to ensure that Britain is “at the forefront of the technological revolution”.
There are four key stages in the technology to autonomy – often referred to as feet off, hands off, eyes off, brain off – with different technologies coming into play when assisted driving is gradually replaced by automated driving. In fully autonomous vehicles, you will just simply climb aboard, set your destination and let the electronics do the rest. The driver then becomes nothing more than a passenger and such cars are here now or ready to test.
A number of car manufacturers claim to be on schedule for building and launching self-drive cars that require absolutely no human intervention. Such vehicles are currently being tested on roads in the UK and we could see them being used more widely in the early 2020's, so there is no doubt that the insurance industry will be profoundly changed as driverless cars come on to the roads.
Currently 90% of accidents are caused by human behaviour and many such accidents will be reduced or minimised following the introduction of driverless vehicles and the removal of human error. But accidents can, and will still happen, so motor insurance won’t become obsolete. It could be that the manufacturer of the vehicle or the manufacturer of the individual technologies may accept responsibility, but it is possible that the driver may still be held partially accountable.
Any cover provided by the manufacturer will probably be limited to incidents of vehicle software malfunction. But this will not be adequate to cover a wide variety of other situations currently covered by Comprehensive policies such as vandalism, arson or a passenger opening a door into a wall or passing pedestrian or cyclist….the list goes on.
Driverless vehicles relying on wireless connectivity will bring with them new risks such as cyber crime, hacking, ransomware so insurance underwriters will need to consider new products to reflect the new risks but that also provide some of the "traditional" Comprehensive cover.
There are many insurance aspects that need to be considered before driverless cars are sold to the public, and whilst the insurance industry is noticing a change of pace in the development of this technology, it is still unclear exactly how the insurance market will change. Car manufacturers will need to work closely with insurers to understand the changing risks.
Even in the current market there are few, if any, products on the market which cover every eventuality, so there are many questions yet to be answered, risks to be identified, and problems to be resolved. Driverless vehicles will carry a hefty price tag though, so the number on the road will be limited until the technology becomes more affordable, but this is happening faster than people think, so it is wise to be prepared for change.
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