How self-driving cars will affect insurance

Last year the auto industry took big steps in testing autonomous cars, which means countries around the world are getting ready for more technology on the roads. We’ll be seeing more rules, regulations and legislations put in place to help prepare drivers for… well, driverless vehicles. Here’s what you need to know about self-driving cars in Canada and how they’ll be insured.

What’s the deal with self-driving cars in Canada?

As of now, Ontario is the only province allowing self-driving cars to be tested on public roads. There are no rules around when they can be on these roads, or where they can go, but, the key word here is tested. In 2016, Ontario launched a 10-year pilot plan allowing self-driving cars to hit the roads with a licensed driver in the driver’s seat (at all times) as a safety precaution. Although there are no provincial “rules” for testing self-driving cars, there are only certain levels of autonomy that are being piloted right now. There’s a five-level autonomy scale, with Level 0 being cars with normal cruise control and Level 5 being fully automated cars with no driver needed. The Ontario pilot is allowing levels 3-5 to be tested with a safety driver.

Anyone who participates in the pilot must have at least $5 million in liability coverage on their insurance (your average auto policy usually has $1-2 million in liability, for context).

Are self-driving cars safer?

Since most autonomous cars are still being tested, it’s hard to say. However, it’s important that they’re allowed to be tested on public roads so that when the technology is actually deployed, they’ll be ready for action on any road.

Once they’re fully developed, the Canadian Automated Vehicles Centre of Excellence has said that self-driving cars are safer and could potentially reduce collision deaths by 80%.

How will self-driving cars affect insurance?

The biggest questions around insuring these cars have to do with liability (when there is an accident, who would be at fault?) and safety (can autonomous cars handle different weather conditions? Can it identify a bicycle?). As testing becomes more prominent, insurance companies are starting to take a closer look at the risks associated with self-driving cars. Some companies believe that such technology on the roads will reduce the number of accidents from things like distracted driving. However, it’ll take time to affect the insurance industry overall.

If the insurance industry gets involved in self-driving cars coming to Canada in the early stages, it’ll have influence on law-making and vehicle safety, especially since most auto insurance policies and laws are centered around human error being the main cause of accidents. The Insurance Bureau of Canada published some extensive research on autonomous cars and concluded three recommendations for insurance companies:

Create a separate insurance policy covering both driver negligence and technical malfunctions (to make it easier to assign fault to an accident)
Share data from these cars with car manufacturers, insurers, and the owners of the car to help determine who’s at fault for an accident
Update federal safety standards to include this new technology

Data will play a big role in determining how self-driving cars will be covered by insurance. It’ll be interesting to see, once testing is complete, how these robo-cars are welcomed on the roads!

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