It seems the future is finally here, at least by the measure of self-driving cars. On January 1, 2016, the Ontario government opened up the province’s roads for the testing of autonomous vehicles. Tesla offers a car already available with a semi-autonomous mode that actually allows the driver to take hands off the steering wheel and give over control to the onboard systems and sensors to drive the car. It’s a major leap in technology and one that’s not without a number of challenges.

Available Technology

In the government’s press release, an automated vehicle was defined as:

“automated vehicles are driverless or self-driving vehicles that are capable of detecting the surrounding environment using artificial intelligence, sensors and global positioning system coordinates.”

That definition describes vehicles that incorporate technology that’s already available. The interesting things is that, to date, many of these technologies have been added to vehicles without any regulation or legislative oversight. That is, there is no government approval process in place to guide how much autonomy is permitted or what systems are allowable.

Some autonomous systems are not only available, but commonly advertised in new cars.

  • Brake Assist – sensors detect a possible impact and brake the car automatically
  • Lane Sensing Systems — lane markers are monitored and lane drifting is prevented
  • Automated Parking – hands-off parallel parking at the touch of a button
  • Car Summoning – using a smartphone, a driver can have a car back out of a garage remotely

In the case of Tesla’s system, software upgrades made through the vehicle’s telematics mean that increased automation may be available with a simple system update.

Insurance Impact of the Driver-less Car

insurance policy

One of the big questions with autonomous vehicles is where liability is assigned when an accident occurs. One piece of the puzzle may have appeared when Volvo’s CEO announced in October 2015 that the company would accept liability for accidents that occur when its vehicles are in autonomous mode. In the U.S., the National Highway Traffic Safety Administration informed Google that “driver” would refer also to a self-driving artificial intelligence system, for purposes of regulation.

Both of these are positive to the future outlook for the progress of autonomous vehicles when considered alongside the Ontario government announcement. It remains to be seen if insurance products emerge before regulations are legislated. While it’s logical to expect that insurance companies won’t act until laws are in place, precisely the opposite occurred with ride-sharing insurance, as at least two insurers worked with ride sharing company Uber to develop tailor-made insurance products for a new market, even while municipal and provincial governments grapple with the regulatory ramifications.

With that model in mind, could automated car manufacturers team up with insurance companies? For example, Volvo could partner with an intrepid insurer to develop a three-way policy between the insurer, the motorist and the manufacturer, to cover incidents occurring in autonomous mode. Such a step would certainly add to consumer confidence in driver-less car technology.