Guide To Insurance for Self-Driving Cars

  • Snap Desk
  • 29-Jun-2022
Transportation Services

What You Need to Know About Self-Driving Cars and Insurance

Are you on the lookout for competitive car insurance in Toronto or auto insurance quotes for anywhere else in Canada for a self-driving car? Driverless vehicles may seem like a thing of the distant future, but they are inching ever closer to becoming a reality in the Great White North. Some companies like Volkswagen and EV giant Tesla have even begun to test self-driving cars on North American roads. These vehicles will soon be available for sale to the wider public market. Moreover, some autonomous vehicle companies have begun to partner with ride-share services to pick up and drop off customers without any need for human drivers. Of course, many questions about self-driving cars still remain. Particularly when it comes to car insurance and exactly how it will work Here is what you need to know about finding car insurance for self-driving vehicles.

Challenges in Insuring Self-Driving Cars

Canadians looking for car insurance in Toronto and other parts of Canada need to be aware of the challenges involved in insuring autonomous vehicles before they go ahead and purchase one. Some of the primary challenges that insurers face include:

Vehicle insurance and liability

Liability insurance is a difficult concept for driverless vehicles. These cars don’t have human drivers that can be held liable for damages. Governments will need to adapt policies and regulations to align with new technologies and find solutions for self-driving car insurance that works well with emerging transportation innovations.

Distinguishing between objects

Another major hurdle for self-driving cars is their ability, or lack thereof, to identify objects around them and distinguish between objects like humans, trees and animals. Companies are continuously improving the technologies that help these vehicles to classify images and objects. AI is becoming increasingly adept at recognizing different forms. Experts predict that any image-classification issues that are present today will likely cease to be problematic in the near future.

Hacking and cyber-attacks

Advanced computer systems prone to hacking power self-driving cars. The results of a security breach can be especially serious, but tech companies are creating autonomous vehicle systems alongside world cybersecurity leaders to minimize the risk of future breaches.

Considerations for Self-Driving Car Insurance

Insuring self-driving cars differs in many ways from classic car insurance in Ontario and Ottawa auto insurance quotes. These are a few of the factors that will set this form of insurance apart from standard vehicle insurance policies.

  • Expenses In the US, the average annual insurance premium for a Tesla is around $4,352. Premiums ‌vary depending on the model of the vehicle, the area in which it’s insured, the trim level, and the type of coverage required. Insurance premiums will also vary depending on numerous other factors that insurers use to calculate them, including drivers’ ages and driving records.
  • Brand-specific insurance Some self-driving car manufacturers like Tesla have begun to offer their own car insurance. Tesla’s insurance is currently only available in California, but may soon be available throughout North America as well. According to the company, its insurance premiums for the Tesla Model S and the Model 3 are 20% and 30% lower than those offered by third-party insurers, respectively.
  • Implications of autonomous tech The majority of car accidents today are due to human error, which means that autonomous technology has the potential to significantly decrease the number of accidents that take place on the road. These implications will redefine car insurance and premiums, depending on the type of vehicle you own. Future drivers who choose to own human- driven vehicles may eventually pay higher premiums than those who choose self-driving cars.
  • Regulations. Individual provinces and states regulate car insurance and each jurisdiction has different rules. This will also pertain to self-driving cars, which will get insured according to either the no-fault system or the tort system.
  • Underwriting. Underwriting may change the process of insuring autonomous vehicles. Most current underwriting criteria, such as accident records, number of miles travelled, and location, will still apply, but may become less important than the type, make and model of the vehicle that’s insured. Future drivers’ premiums may get affected by whether or not their local areas have self-driving lanes, as well as whether or not they use apps to monitor their driving activities.
  • Liabilities Self-driving cars have placed the liability system in a place of uncertainty. Current laws punish drivers, but legal experts predict that the parties responsible for the production of self- driving cars may get saddled with more responsibility in this regard. This includes sensor vendors, software developers, body manufacturers, and vehicle designers.
  • Costs of repairs. The volume of traffic accidents is predicted to fall as more self-driving cars use crash avoidance technology. This technology is expensive, which could increase the cost of vehicle repairs.
  • Vehicle ownership. Thanks to the rise of ride-sharing, many drivers in urban areas are opting to avoid owning their own cars. Once all cars drive themselves, some experts believe that car ownership will decline even further.

Understanding Safety and Claims

Car insurance Toronto based companies and those across the rest of Canada are still attempting to weigh up the risks and benefits of automated technologies to draw up effective policies and rates. Whether claims will rise or fall will largely depend on how automation can influence passenger safety. Insurers have found that vehicles equipped with ADAS technology show a 27% reduction in physical injury claim frequency and a 19% reduction in the frequency of property damage claims. Combinations of features on newer models of self-driving cars can influence these outcomes considerably. People who purchase vehicles with ADAS features also expect that their insurance premiums will get lowered.

Canadian insurers can look to ADAS variables and data on driving behaviours when underwriting policies and setting premium rates. These rates may get based on factors like whether ADAS is turned on or off, how it has been set up, whether or not passengers are wearing safety belts, and whether or not the vehicle’s headlights are on. According to the Highway Data Loss Institute, technological advancements can reduce insurance claims for both bodily injury and property damage. This was especially true when multiple features engage, and during the use of second-level automation features like lane departure warning, automatic emergency braking, and forward-collision warning.

The Future of Driverless Car Insurance

Driverless cars are almost certainly going to play a major role in the future of transportation. When this will take place, and to what extent, will be significant considerations as collaboration and planning will be required to build appropriate urban infrastructure, AI advancements, regulations, and consumer trust. One study notes that 35% of participants said that they would be more likely to purchase a self- driving car if doing so lowered their insurance rates. If Canada prepares adequately for the rise of autonomous vehicles, lower rates could be one of the many benefits that drivers can expect to enjoy in the future.