How Autonomous Driving Technology Affects Electric Car Insurance

The world has seen incredible technological progress over centuries. Technology has grown a lot and changed how things work today. A new technology that is heading towards revolutionizing the automobile sector is self-driving vehicles. They were not just in science fiction but have now nearly become a reality.

 

Many of you would be excited about this upgrade. But if a car doesn't need much human help, does it even need insurance? Read below, to get the answer about insurance for self-driving cars, called autonomous vehicle insurance.

 

What Are Self-Driving Cars Actually?

Before going into self-driving cars insurance, understand what these cars actually are. Consider you are in a car that safely takes you where you want to go. You just need to tell it where then relax and enjoy the journey.

 

The car uses sensors to handle different situations on its own. That is the idea of a self-driving or autonomous car, and it might become a reality in the near future. Some major companies have already developed these cars, and soon, they might be a usual sight on the roads.

 

Different Stages of Autonomous Vehicles

Autonomous vehicles evolve through different stages, and they are categorized into six levels, ranging from zero to five. Each level represents the extent of automation present in the vehicles, from entirely manual to fully autonomous:  

 

Stage 0: At this level, vehicles are entirely manual, rely only on human control, and don't have any form of automation.

 

Stage 1: Vehicles in this stage will have a few autonomous features but still need human intervention for most driving functions.

 

Stage 2: These vehicles can have at least two automated features, such as braking and cruise control and offer partial assistance to the driver.

 

Stage 3: In this stage, the vehicle would have a substantial level of automation, but it still needs continuous driver supervision.

 

Stage 4: Vehicles here are fully automated but include a human option. It permits the driver or passenger to assume control if needed.

 

Stage 5: This last level represents complete automation without any need or provision for human interference. These vehicles lack traditional controls like steering wheels, brake pedals, or accelerators, operating entirely autonomously.

 

Why Autonomous Cars Need Insurance

With its increased level of safety, one could consider that there would be no need for insurance for autonomous vehicles. But here are a few situations where having an insurance might be necessary

 

1. Different Automation Levels

Cars are categorized into different automation levels (0-5), and those not fully autonomous (levels 0-4) may still need human intervention, which can potentially lead to accidents. These different levels of automation mean that until vehicles get full autonomy, the chances of accidents caused by human intervention are possible, and this can be covered by insurance.

 

2. Technical Faults

Fully autonomous vehicles may overcome human driving errors, but they remain vulnerable to machinery breakdowns or technical faults. So, insuring a fully autonomous car becomes important due to these potential technical failures.

 

3. Damage Cover

Autonomous cars are at risk of theft, loss, or damage from accidents or various calamities such as earthquakes, cyclones, or riots. Therefore, getting an insurance policy becomes important to cover these diverse risks.

 

Impact of Driverless Cars on Insurance Policy

Despite the advanced safety systems in driverless cars, there would not be any substantial impact on autonomous vehicle insurance. Many autonomous vehicles come with advanced safety features like blind-spot detectors and collision warning systems, yet there has not been a much reduction in the frequency of accidents.  

 

Although autonomous technologies assist drivers in avoiding collisions, the overall number of reported accidents remains largely unaffected. However, there has been a positive development in terms of fewer deaths from these accidents. This suggests that while these safety innovations may not drastically reduce accidents, they do contribute to a decrease in fatalities.

 

How Would Insurance Companies Adapt To Autonomous Driving Technology?

Right now, it is hard to know the exact outcome of autonomous vehicles on car insurance. However, the transition is expected to be gradual, providing insurers the opportunity to adjust in response to these transformations. There are three major areas for the insurance providers to look for, and it includes:

 

Cybersecurity: The inclusion of hardware and software will eventually rise as cars are going to become more automatic. So, the risks associated with cyber threats, such as cyber theft, ransomware, hacking, and misuse of automobile-related information, may rise. Car insurers are expected to offer coverage for such cybersecurity risks.

 

Infrastructure Insurance: The protective systems, including cloud servers and signals designed for rider and driver safety, will have considerable potential for annual revenue through premiums. Insuring these infrastructures might see substantial demand.

 

Product Liability: As vehicles heavily rely on car-related sensors and chips prone to software bugs, memory overflow, and algorithmic defects, insurers are expected to cover liabilities coming from such failures.

 

Conclusion

The emergence of autonomous vehicles is set to revolutionize the way people drive. At the same time, it also poses important questions about self-driving cars and insurance. Though the need for insurance cannot be negated, the nature of insurance, whether Third-Party or Comprehensive Insurance, may change for these cars. Leading Electric Car Insurance providers, such as Shriram General Insurance, are set to adapt and evolve to meet the demands that come with autonomous driving technology.

 

FAQs

1. How sustainable are self-driving cars?

Traditional fossil fuel cars that run on petrol and diesel emit billions of tonnes of carbon dioxide. However, self-driving electric cars are more environmentally friendly.

 

2. What would be the impact of driverless cars on the car insurance industry?

There can be a significant reduction in road accidents with driverless cars, but still, there may be issues such as accidents due to technical faults, theft, and natural or man-made disasters. Therefore, car insurance can still be applicable to those issues.

 

3. How big is the market for driverless cars?

In many parts of the world, self-driving cars are not yet legalized due to safety concerns. However, there is a greater chance that it may change with the evolution of better technologies.