Skip to content

How do you insure a driverless car? on Vodafone IE

How do you insure a driverless car?

How do you insure a driverless car?

Emma Kennedy

CNN Business

How do you insure a driverless car?

The transportation revolution raises big questions for insurers around liability, data and future revenues.  Technology giants and automakers are investing billions. But who will pay when a crash does happen?
 

(CNN) Technology giants and automakers are investing billions of dollars to develop driverless cars that promise to make roads safer. But who will pay when a crash does happen?

The transportation revolution raises big questions for insurers around liability, data and future revenues. With driverless car trials ongoing in a number of markets, policymakers are already preparing for the new landscape.

In the United Kingdom, work is underway to ensure a regulatory framework is in place when automated vehicles hit roads. Last year, lawmakers approved the Automated and Electric Vehicles (AEV) Act, bringing greater clarity on insurance policies and liability for road accidents involving driverless vehicles.

What about liability?

David Williams, technical director at AXA Insurance UK, explained that British rules set out a clear structure for liability, with car owners still required to purchase an insurance policy that complies with road traffic rules.

Many automated cars will be able to switch modes, from automated to driver-controlled, but having two distinct insurance policies to cover each scenario is "too complicated," according to Williams.

Instead, car owners will buy one insurance policy that covers both driving modes. Insurers will continue to pay out for claims, but could recoup some costs from carmakers when their technology causes an accident.

Williams expects the number of road accidents to decline, which means insurers will likely face fewer motor claims. "And a proportion of these claims will be passed on to the manufacturers," he said.

Insurers want to see similar rules put in place throughout Europe.

"We take the view that compulsory third-party liability insurance works well in protecting road users and that this will continue to be the case with ongoing technological developments, such as connected and autonomous vehicles," said Nicolas Jeanmart, head of personal insurance, general insurance and macroeconomics at Insurance Europe.

Safer roads

According to figures from the US Department of Transportation's National Highway Traffic Safety Administration, human error is a factor in 94% of car crashes.

Automated cars could remove this human error factor and lead to safer roads -- and lower insurance premiums -- for car owners. "If, in time, 50% of cars are safer and have less accidents, that means the remaining manual cars will have less accidents too," Williams said.

Claims costs for accidents involving automated cars might initially be high due to the cost of replacing damaged technology, such as sensors. But Williams thinks costs will decline as production of autonomous vehicles ramps up.

When accidents do happen, new technology will mean greater insights on what happened and who is at fault.

"For claims to be handled as swiftly and smoothly as possible, it will be vital that insurers and other parties with a legitimate interest have access to the relevant in-vehicle data that establishes the facts of an accident, so that liability can be correctly apportioned," said Jeanmart.

A changing market

Insurers expect that a shift towards driverless vehicles will ultimately lead to lower car insurance premiums and new types of products.

For example, Williams said that insurers might offer insurance products that encourage car owners to use autonomous mode more frequently, offering a premium incentive to reflect the reduced risk.

In the future, automated vehicles could allow for shared car ownership, which would mean new types of insurance policies.

"Even in the case of shared vehicles, the vehicle itself still needs to be insured, regardless of whether the insurance is shared between the owners or otherwise," Jeanmart said.

Close message
    5G Created with Sketch. add-ons-boosts-mid icon-app-store basket-change bill-or-report-mid bill-pay-phones-icon 4C91DB73-75FE-4565-8F69-BC6C675B1EA1 bin block bonus broadband-dark broadband-icon broadband-light broadband-or-wifi-mid broadband bundles-mid business Calendar Created with Sketch. calendar Icons+Indicators / System-Icons / landline_or_call / #333333 Created with Sketch. call Calls Created with Sketch. camera case-study-mid cases chart-line-mid chat-mid chevron-down chevron-left chevron-right chevron-up close-small close collections comment-mid community-or-foundation-mid community completed-mid connected-devices-mid contract converged-proposition-mid Data Created with Sketch. Icons+Indicators / System-Icons / data / #333333 Created with Sketch. data-mid data deals-mid delivery dislike document-mid Download edit engineer-mid error-circle eSim data eye facebook filters fixed-line-mid generic-tariff-plan-mid Gift Icon go help-mid home-mid landline-or-call-mid letters like mail-new-mid menu message minutes-sms-mid mobile mobile-mid mobile my-vodafone-or-my-profile-mid my-vodafone need-help-mid network-signal-mid orders payg-mid payg-phones-icon F86C85F6-FFFF-4C62-8F9A-45D7251FC836 payment-mid photos placeholder play-store play plus reload report return-product-mid roaming-mid roaming search security-mid settings-mid roaming shopping-trolley-mid shopping Sim card sim-mid sim-swap-mid sim Icons+Indicators / System-Icons / sms / #333333 Created with Sketch. sms-or-text-mid sms-text-mid spinner squares technology squares three-points tick-simple tick-simple info-circle top-up-2021 top-up-icon top-up-mid travellers-info-mid roaming tv-mid block twitter upgrade-mid value vf-tv-icon vodafone-store-mid vodafone voice-of-vodafone-alerts-mid warning-mid world
    Processing ...
    Please wait.

    About seconds remaining...

    Close dialog
    Skip to content

    Set your password for My Vodafone

    Close dialog
    Skip to content
    Close dialog
    Skip to content
    Close dialog
    Skip to content