Driverless cars will reshape motor insurance – and this is how…

Driverless cars will become a reality in the near future. The change will be global and of seismic proportions – and one of the most significant knock-on effects will be how insurers adapt to the changed circumstances. A recent survey indicated that over two-thirds of people would value the ease of a driverless car.

The insurance industry in the UK, and further afield, is about to undergo a huge shake up that could see it embrace the new technology and behavioural data derived from a car that widespread use of autonomous vehicles could start to produce?

But beyond the enhancement of insurer’s data enrichment programmes, a number of challenges and fresh opportunities lie in store.

A fundamental issue is around who needs to be insured and who pays out. If a driverless car is involved in an accident, should the passenger be with the insurance? What about the other vehicle or pedestrians, if any is involved? Driverless cars will likely have a central pilot – are they liable? Is the manufacture liable for owning the mechanics and computer that powers the vehicle?

Given these new circumstances, the way people obtain insurance to cover their motoring will be ripe for change. It might be that individuals have a policy that covers them for whatever vehicle they’re in, even if they’re not driving, rather than for them using a few designated vehicles.

That policy might have to cover traditional cars and autonomous vehicles, because we might still use both. It is important that ‘might’ is the emphasis here – as essentially it is an unknown concept. But, as unknown as it may be with the UK government funded fleets already in the roads and commercial vehicles already purchasable in car showrooms in America, the might shouldn’t be underestimated – nor ignored.

While driverless cars are unlikely to take to our roads in the immediate future, their arrival is more a matter of ‘when’ rather than ‘if ‘and might should be considered as when. As such, insurers need to think through their offering and prepare policies and services ready for when these cars do arrive and when science fiction becomes reality.

Fundamentals to consider should be around an operational infrastructure that has the ability to flex as new ways of driving, and insuring prevails in the near-term.

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