'Driving' Autonomous Cars
30 Jan 2017
Driverless cars may seem like a fantasy from the future. But as technology catches up with the present day, how is the insurance industry equipped to respond to this emerging risk?
Whilst driverless cars have been in development for nearly 100 years, the first truly autonomous car was completed in the 1980s. More recently, Google conducted tests which have seen their driverless cars complete a combined distance of nearly 2,500,000km and are nearly ready to launch as Waymo, US tech start-up Comma.ai have already released their self-driving software and US insurer Adrian Flux launched what is thought to be the first driverless car insurance policy.
The benefits of using an autonomous car include the use of lasers and motion sensors to detect other cars, automatic emergency braking (AEB) and GPS to navigate distance and journeys. The advantages of these are that traffic accidents will be reduced, resulting in fewer deaths and injuries. Car parts, such as steering wheels, brakes and pedals, could also become redundant meaning that those with disabilities, visual impairments or elderly people could also benefit from this technology. This may look like an all win situation for the consumer but what does this mean for the insurance industry?
Currently, the insurance industry is mainly concerned with the manufacturing and testing of this technology. Whilst there are no self-driving cars available for sale to the public yet, their development has seen some technical issues. Google encountered problems whilst testing their cars as by the end of last year 14 collisions had been reported. However 13 of these collisions were due to other drivers. It was only one incident where the car itself was at fault due to a software error.
Collisions during testing in controlled environments will still cause physical damage as well as the need for parts to be replaced. Errors caused due to software errors are more complicated as it will need to be assessed what went wrong, if the software can be reprogrammed to avoid similar issues, as well as ascertaining the chances of a similar issue happening again. Take all of these factors into the real world and you also have to consider auto physical damage to other vehicles, damage to public property and physical injury to other people.
Tesla also experienced a high-profile crash in 2016 which resulted in the fatality of the car’s operator. After an investigation it was revealed that the driver was at fault as they were using a driver-assist setting that still required a level of operation which was ignored. Dave Sullivan from AutoPacific Inc. commented at the time that, “The auto industry just let out a giant sigh of relief. This could have started a snowball effect of letting automakers and suppliers become liable for human error.”
These issues highlight the need to educate drivers on how to use autonomous cars as well as establishing the difference between them and semi-autonomous vehicles. According to a survey performed by TIRF (Traffic Injury Research Foundation) who spoke to 2,600 Canadians in May 2016:
TIRF CEO Robyn Robertson believes it’s not just the insurance industry that needs to step up but that “government also plays an important role to ensure responsibility in advertising and to raise public awareness about ways that new vehicles are tested and made available to consumers”. Different driving settings will be available resulting in different levels of attention from the driver. If a driver mistakenly thinks they have selected ‘autopilot’ but is in fact using a semi-autonomous mode an accident is likely to occur. There may also be a potential scenario where a driver uses a fully automated setting but a technical fault operates the vehicle in a semi-operational mode, an investigation and inevitable claim will most likely be made if covered correctly. Insurance policies will need to distinguish between fault of the manufacturer, software provider and driver.
Whilst the widespread use of fully autonomous cars may still be a long way off, the reduced risks due to technology enhancing passenger safety are still anticipated to be a huge incentive to consumers, as noted by Andrew Lo, CEO of Kanetix.ca, “It’s still a jump for most people to make in terms of going completely driverless, but Canadians are interested in these improved safety features and, as a result, seem willing to slowly adopt more automated functions”. With discounts inevitably made to drivers, insurers will need to put their focus on manufacturers and salespeople. However driver errors are still likely to occur if vehicles are not operating properly. Whilst Tesla are developing a software that will detect if a driver is not paying attention, drivers will still need to make sure they have appropriate personal liability cover in the event of a user error.
Whilst driverless cars have been in development for nearly 100 years, the first truly autonomous car was completed in the 1980s. More recently, Google conducted tests which have seen their driverless cars complete a combined distance of nearly 2,500,000km and are nearly ready to launch as Waymo, US tech start-up Comma.ai have already released their self-driving software and US insurer Adrian Flux launched what is thought to be the first driverless car insurance policy.
The benefits of using an autonomous car include the use of lasers and motion sensors to detect other cars, automatic emergency braking (AEB) and GPS to navigate distance and journeys. The advantages of these are that traffic accidents will be reduced, resulting in fewer deaths and injuries. Car parts, such as steering wheels, brakes and pedals, could also become redundant meaning that those with disabilities, visual impairments or elderly people could also benefit from this technology. This may look like an all win situation for the consumer but what does this mean for the insurance industry?
Currently, the insurance industry is mainly concerned with the manufacturing and testing of this technology. Whilst there are no self-driving cars available for sale to the public yet, their development has seen some technical issues. Google encountered problems whilst testing their cars as by the end of last year 14 collisions had been reported. However 13 of these collisions were due to other drivers. It was only one incident where the car itself was at fault due to a software error.
Collisions during testing in controlled environments will still cause physical damage as well as the need for parts to be replaced. Errors caused due to software errors are more complicated as it will need to be assessed what went wrong, if the software can be reprogrammed to avoid similar issues, as well as ascertaining the chances of a similar issue happening again. Take all of these factors into the real world and you also have to consider auto physical damage to other vehicles, damage to public property and physical injury to other people.
Tesla also experienced a high-profile crash in 2016 which resulted in the fatality of the car’s operator. After an investigation it was revealed that the driver was at fault as they were using a driver-assist setting that still required a level of operation which was ignored. Dave Sullivan from AutoPacific Inc. commented at the time that, “The auto industry just let out a giant sigh of relief. This could have started a snowball effect of letting automakers and suppliers become liable for human error.”
These issues highlight the need to educate drivers on how to use autonomous cars as well as establishing the difference between them and semi-autonomous vehicles. According to a survey performed by TIRF (Traffic Injury Research Foundation) who spoke to 2,600 Canadians in May 2016:
- nearly 25% of drivers said they would drive whilst tired
- 17% of drivers would text or read whilst driving
- 10% of drivers would nap behind the wheel
- 9% of drivers would drink and drive
TIRF CEO Robyn Robertson believes it’s not just the insurance industry that needs to step up but that “government also plays an important role to ensure responsibility in advertising and to raise public awareness about ways that new vehicles are tested and made available to consumers”. Different driving settings will be available resulting in different levels of attention from the driver. If a driver mistakenly thinks they have selected ‘autopilot’ but is in fact using a semi-autonomous mode an accident is likely to occur. There may also be a potential scenario where a driver uses a fully automated setting but a technical fault operates the vehicle in a semi-operational mode, an investigation and inevitable claim will most likely be made if covered correctly. Insurance policies will need to distinguish between fault of the manufacturer, software provider and driver.
Whilst the widespread use of fully autonomous cars may still be a long way off, the reduced risks due to technology enhancing passenger safety are still anticipated to be a huge incentive to consumers, as noted by Andrew Lo, CEO of Kanetix.ca, “It’s still a jump for most people to make in terms of going completely driverless, but Canadians are interested in these improved safety features and, as a result, seem willing to slowly adopt more automated functions”. With discounts inevitably made to drivers, insurers will need to put their focus on manufacturers and salespeople. However driver errors are still likely to occur if vehicles are not operating properly. Whilst Tesla are developing a software that will detect if a driver is not paying attention, drivers will still need to make sure they have appropriate personal liability cover in the event of a user error.