Insurance Institute report examines challenges of insuring autonomous vehicles

The report from the Insurance Institute of Canada examines some of the issues surrounding insurance for autonomous and semi-automated vehicles.

Toronto, Ontario — June 27, 2016 — Semi-automated vehicles and cars with advanced driver assistance systems have already begun to enter Canada’s fleet. While we can’t know for sure when the first true driverless cars will arrive, it seems certain that they will be on the roads at some point in the near future. This provides a challenge for the insurance industry and regulators in determining precisely who is responsible in the event of a crash or other accident.

“Automated Vehicles: Implications for the Insurance Industry in Canada” assesses the developments of automated vehicles on Canadian roads within the next five to 10 years. The report was prepared by the Insurance Institute of Canada and it raises a number of important questions for the insurance industry:

• Will vehicles have onboard devices to identify whether or not the vehicle’s technology was engaged at the time of a collision?

• Will insurance companies be allowed to access this information?

• How will insurance companies recover costs when automakers are found to be at fault?

• How can property and casualty insurers reduce their risk of loss?

• How should costs be shared when driver errors and vehicle automation systems failure both contribute to a collision?

According to the report, the frequency of collisions resulting in serious injuries and vehicle damage will decline for new, semi-automated and self-driving vehicles. However, this may be offset for the insurance industry by the expected higher cost of repairs for vehicles that do experience collisions. As a result, the report predicts that the true impact of vehicle automation on insurance claims costs and industry revenues will only begin to emerge over the next 10 years.

You can download a copy of the free report from the Insurance Institute of Canada’s website at this link.

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