Posted on: June 20, 2018

Driver-less vehicles are coming to South Australia – what does it mean for insurance?

With South Australia’s first ever driver-less bus taking to the roads, GIA Insurance Brokers thought it was timely to have a look at what these driverless vehicles might mean for insurance in the future.

It’s exciting technology, to be sure, and offers huge opportunities – especially if you think of our ageing population that may not have ready access to public transportation. It could also increase road safety, as the driver-less vehicles don’t get tired, distracted by their phone or get behind the wheel after too many drinks.

Insurance risks for driver-less vehicles

According to a recent Insurance Business article, there are questions surrounding liability that remain unanswered when it comes to driver-less cars. The main question is around who will ‘own’ the risk, the car manufacturer or the customer. There’s not yet regulation in place to answer this question, and it’s likely that insurers will need to develop or tailor existing insurance solutions that take into account additional factors like accident frequency, commercial/personal use of the vehicle, road conditions, and condition/roadworthiness of the driver-less vehicle.

Due to the technology involved with driver-less cars, there is also a larger cyber risk involved – there could be incidents and issues arising from cyber-hacking, terrorism, kidnapping, theft and so on.

On the other hand, the same technology could also provide us with far greater (and less ambiguous or biased) data on traffic accidents or vehicle malfunctions. We may learn even more about how to prevent accidents and keep everyone safer on the road.

And, in some positive news for your pocketbook, if the driver-less cars work as anticipated (fewer accidents), we could also see reduced insurance costs and premiums overall.

New report calls for changes to our laws

A new report has called for changes to our legislation in preparation for the arrival of driver-less vehicles, with full automation expected to occur in Australia within the next 10 years. The report, titled “Transforming Mobility”, was a joint initiative from auto insurer NRMA, PricewaterhouseCoopers(PwC), and Keolis Downer.

It highlighted the need to update the nation’s more than 50 federal and state laws, including those related to CTP insurance, before the widespread launch of self-driving cars.

According to this Insurance Business article, the report said that for computer-piloted cars to hit the road en masse, the absence of provisions for non-human drivers in federal and state laws should be addressed first. This includes significant changes to existing traffic laws regarding future fines and penalties, as the introduction of self-driving cars would shift the liability from human drivers to the registered operator of an autonomous vehicle.

The report also warned that changes to the current CTP insurance system should be made to ensure that drivers, passengers, and pedestrians would all be adequately protected in case of an accident caused by an autonomous vehicle.

The ethics of driver-less vehicles 

The first pedestrian death involving a self-driving car highlights the many ethical challenges posed by autonomous vehicles.

Just like human drivers, there is always an amount of risk when operating a vehicle, and part of the responsibility of the driver is to weigh up and calculate those risks (sometimes quite quickly).

The driver-less vehicles have to allow for some risk, or they wouldn’t leave the garage. But what is the correct way to program the car to decide on acceptable risk or, even worse, in the case of unavoidable injury or death – how does the car decide which people are prioritised? Is it based on the total number of injuries or deaths that could be prevented? Is it based on the age of the occupants?

There’s a classic trolley/tram scenario, a thought experiment, that asks if you’re driving a trolley that is hurtling towards a group working on the tracks but if you pull the lever it would instead hurtle towards a lone worker. What is the right choice, ethically?

This may be the kind of decision we’re asking (or programming) driver-less vehicles to do. And should this programming allow for preferences by the owners of the car, or be based on a set of pre-agreed moral codes?

It’s not likely that we’ll have these mind-bending questions answered before driver-less cars begin to appear on our roads, but it’s worth continuing the discussion.

Future predictions for driver-less cars

There are many great benefits that could arise from a future with automated vehicles.

We can provide transport options that didn’t exist before, especially for our elderly or those with physical challenges.

It could reduce congestion on the roads – especially if there’s a reduction in accidents, we’re less likely to hear of huge delays in the traffic report.

And, imagine if your car can drop you off at work, and then instead of taking up valuable parking space (and costing you money for that parking spot), it heads off to do its second job as an Uber-type ride sharing vehicle. Your car could be making you money while you are at work – a very nice new idea of a side hustle!

But there are also grey areas – many of these vehicles are not quite ‘fully’ automated or completely able to be operated without a driver. They still rely on a driver for some situations, which means that the liability and responsibility is split.

We think this is going to be the biggest challenge in the shorter term – making sure our clients have the right insurance solution for these split or shared responsibility situations.

So until the spread of these driver-less (or semi-driver-less) vehicles begins in earnest, watch this space! In the meantime, if you need a normal ‘human driver’ quote for your car or motor vehicle insurance, don’t hesitate to contact us.

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