Responsibility & insurance in an autonomously driven world
The mass adoption of autonomous vehicles isn’t going to be an easy ride. Before self driving cars, buses, trucks and lorries become common, entire road systems will need to change. Technology itself has a lot of work to do to ensure the total safety of passengers, and there will always be public scepticism. One of the most serious issues is insurance. How do you attribute responsibility in the event of an AV accident? The existing insurance process involves deciding which party is at fault and then demanding compensation. When an autonomous vehicle is involved in an accident, it’s far more difficult to make these calls. Despite this, legacy insurer Adrian Flux has released the first UK insurance policy for driverless cars.
Pioneering AV insurance
Now that Waymo has rolled out autonomous vehicle rides to residents in Phoenix through their ‘early rider programme’, Adrian Flux’s new policy couldn’t have come at a much better time. Finding comprehensive insurance is all the more important as real people begin to use AVs. As you might expect from any standard insurance policy, Adrian Flux will cover any payments made for causing death, injury and property damage. Adding AVs to the mix makes things far more complicated, namely due to uncertainties over responsibility. As well as physical accidents, autonomous vehicle insurance needs to account for software related failures or hacks. Adrian Flux, for instance, covers loss or damage due to cyber attacks, unsuccessful or delayed updates, satellite failure or outages, and other authorised software issues. As well as this, they cover loss or damage caused by using manual override to avoid accidents, which means that the driver is protected when taking control of the car. Although Adrian Flux will cater to early adopters, the firm has set a standard for future AV insurance policies. The issue of attribution still remains, though, and it looks like something claims adjustors will have to grapple with.
How will this new policy impact insurance?
The insurance industry has been disrupted by a wave of InsurTech startups aiming to improve traditional claims processes. This had led to a new type of streamlined, personal insurance which has forced incumbent businesses to rethink their strategies. Financial cover is as important as ever, especially now that most of us own multiple, expensive devices that contain information about our lives. The addition of driverless cars will disrupt legacy insurers and InsurTech companies alike, as both will eventually have to come up with AV insurance policies. Adrian Flux itself is a 40 year old business, as well as the U.K.’s largest specialist insurance broker. If their involvement is anything to go by, other established firms won’t be far behind. By addressing the problem of insurance, new policies for driverless cars could accelerate the adoption of AVs. However, attribution is still a key question that consumers and corporations alike will demand an answer to. Will it be the software companies themselves, or their clients, that are to blame?
With an estimated 10 million self driving cars on the roads by 2020, young and established insurance companies will need to decide how to respond. AV insurance is yet another example of how technology is transforming traditional finance. It’s also a reminder that driverless vehicles have a global reach, despite the countless companies testing autonomous technology in the States. Timing is everything – change too early, and businesses could limit themselves to early adopters. Change too late, and there will be no more vehicles left to cover. For now, other insurers will be watching Adrian Flux very closely indeed.
Who should be responsible for decisions concerning attribution? Will Adrian Flux’s new policy accelerate the adoption of autonomous vehicles? How long will it be before other insurance companies follow suit? Share your thoughts and opinions.