For those eager to try an autonomous vehicle, the future is now. Earlier this year, the Canadian province of Ontario announced it will take applications for driverless test car licenses, providing there is a licensed driver to take over if necessary. This raises a question: How will the insurance industry handle automated vehicle coverage?
Underwriting: Currently, an insured’s accident history and the average number of miles driven are used to price vehicle insurance. But soon the self-driving features of a particular model may become the important factors influencing insurance prices.
“Black boxes”: As well, monitoring driver activity may become the norm. Insurance companies currently offer policies based on driver behavior data gathered through telematics devices (black boxes.) While not in wide use now, these may become more usual as insurers push for increased monitoring of driverless cars.
Costs: Theoretically, the number of accidents should fall as automation increases. With human error taken out of the equation, the result should be reduced cost. Fewer accidents could mean cheaper rates for collision and other types of insurance.
Actually, costs may shift. Manufacturers and suppliers may be held more liable for accidents due to product failure.
Complex parts will be expensive to replace.
Repair costs may increase.
These new complications may make it difficult to ascertain if consumers will see a reduction in costs overall.
The Ontario initiative should yield not only accident stats, but also important insights into the public perception of driverless vehicles. Because, this, too, remains to be seen.