Driverless vehicles…they’re the mode of transport of tomorrow that’s talked about almost every day today. But, for the majority of us, this exciting technology is still a long way off. Our Executive Chairman, Tim Ryan, explores…
Five years ago, most auto manufacturers would have predicted that driverless cars would be on the roads this year. Safety, though, is a primary concern. Driverless, and any automated function of a vehicle, needs to be carefully tested and regulated. That’s not to say, though, that driverless functionality is not being adopted and, as we continue to plan and adapt for the new technology that will shape motor insurance in the years to come, automation in vehicles is progressing quickly.
We’re also all becoming more accepting of the prospect of the advent of autonomous vehicles. A recent study from Capgemini found that 30% of respondents said they’d prefer to ride in a self-driving vehicle rather than a traditional one over the next year and, by 2029, 63% would prefer to ride in an autonomous vehicle.
Defining vehicle automation
For the purposes of vehicle automation, SAE International (previously known as the Society of Automotive Engineers) defines vehicles into six categories:
0 – No automation – every driving function is performed by a human in the car.
1 – Driver assistance – some minor steering or acceleration tasks are performed by the car without human intervention, but everything else is fully under human control. The driver always needs to stay fully engaged in driving.
2 – Partial automation – functions like advance cruise control in which the vehicle can automatically take safety actions, while the driver needs to stay alert at the wheel. The driver needs to stay fully engaged in driving at all times.
3 – Conditional automation – the human driver is able to pass some ‘safety-critical functions’ to the vehicle, under certain traffic or environmental conditions. The driver needs to stay alert, including while passing control to and from the vehicle.
4 – High automation – the vehicle can drive itself almost all the time without human input, but it may be programmed not to drive in unmapped areas or during severe weather. The driver can ‘switch off’ and do other things while the car drives itself.
5 – Full automation – this vehicle can drive by itself in all conditions, without any human intervention. The driver can ‘switch off’ and do other things while the car drives itself.
So, we can see that, in terms of categories 1 and 2, many new vehicles are already offering levels of assisted and automated driving, with assisted technology very much leading the way.
Assisted driving and motor insurance
Of course, any new technology poses challenges as systems and processes need to be put in place to ensure they are well catered for when it comes to insurance. With vehicles taking the wheel for drivers, though, there are many risks and opportunities to consider.
Ultimately, road safety should improve with the advent of assisted, automated and driverless vehicles. Technology will mean that accidents can be predicted and avoided and there will be no room for human error. This, in turn, should mean that, while the cost of vehicles – and therefore the cost of their repair or replacement – will be greater, risk will be lower, which should be reflected in insurance calculations. We’re already seeing this to a degree, with the likes of telematics helping to reduce premiums for younger drivers.
In the meantime, we need to monitor any new types of collision that may occur when a vehicle is providing high levels of assistance, as this could lead drivers to lose focus and attention, not sufficiently engaged to respond to a hazard. Equally, assisted driving features can vary from vehicle to vehicle, also leading to driver confusion that may result in a collision.
We also need to have a clear understanding of the environments in which these vehicles are designed to work.
Automated vehicles and motor insurance
Automated vehicles provide bigger challenges to the way insurance is provided. The main challenges of automated vehicles for insurers comes from the fact that it will be the fault of a vehicle, rather than a person, if there’s an accident.
This means that insurers will become liable for accidents caused when a vehicle is in automated mode and, as the driver is a passenger in this situation, they could be entitled to compensation if they’re injured when their own vehicle is at fault.
Again, though, in general, the more automated the vehicle, the more the margin for human error will be removed.
Finding the framework for driverless vehicles
Of course, the adoption of driverless vehicles depends heavily on regulatory developments in the coming years, with the right legal and technological frameworks both needed. Globally, governments are working to encourage the adoption of this new technology, which is supported by insurers because of the potential to reduce road traffic accidents.
In the UK, rules on insurance and liability will be changed as a result of the Automated and Electric Vehicles Bill. Design rules to create consistency are being drawn up internationally in Geneva by a United Nations body. But regulations controlling Automated Vehicles will not appear for some years.
Until then, manufacturers will not have the market to produce driverless vehicles in high volumes and changes to the way motor insurance works will be minor, with assisted vehicle functionality helping to drive down premiums where possible.
If you’re interested to know more about motor insurance options, contact our Private Clients Division today on 01473 343434.