A new article published by MarketWatch Guides explores the future of insuring autonomous vehicles (AVs). This is the third piece in their “Future of Car Insurance” series. The article, titled “How Will Self-Driving Cars Be Insured in the Future?” overviews the challenges auto insurers may face as autonomous driving is further adopted.
Innovation in AV technology currently outpaces the car insurance industry’s ability to accommodate these changes. One of the biggest changes necessary will be a shift in liability from the driver to the automaker or software company responsible for the AV technology. Further, insurers will face changes in state insurance regulation, as well as underwriting valuations. Repair costs will likely increase as AV adoption increases, while car ownership rates may decrease.
Americans are still at least a decade from fully autonomous vehicles. Experts from The Society of Automotive Engineers (SAE®) outline six tiers (Level 0-5) of autonomous driving, ranging from fully human-operated to fully autonomous. Current technologies like Toyota Safety Sense and Honda Sensing fall within Level 2 autonomy. Mercedes-Benz will soon release the first Level 3 cars to consumers in California and Nevada.
According to Tilla Gode, head of risk and insurance at Waymo, insurance for autonomous vehicles isn’t any different for human-driven cars. She likens the insurance that Waymo has for its Level 4 Vehicles to that of fleet insurance held by a rental car company.
“Just like any commercial entity, we have insurance coverage in place that covers the Waymo driver over the course of the driving task,” Gode explains. “Essentially, there’s a shift from human being drivers to the autonomous system being the driver — Waymo is the driver.”
Overall, the article concludes that the future of auto insurance for driverless cars is full of necessary adaptations, policy changes, and new risks.
Read the full report here.
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