For instance, how do you provide car insurance when a vehicle does not have a human driver? Will the individual owners of self-driving cars need insurance at all? Will manufacturers be liable for accidents their self-driving cars are involved in if it’s found there are flaws in their design?
Let’s take a look at the current state of self-driving cars and how some companies are working to answer these questions.
What constitutes a self-driving car?
Forbes, the U.S. Department of Transportation rates a vehicle’s ability to self drive from Level 0, which is none, to Level 5, which means the car is fully autonomous.
Tesla’s Autopilotis an example of a Level 2, because it can control both steering and throttle. But it cannot make the same decisions that a Level 3 car would make, such as accelerating past a slow car.
Cars at Level 4 can fully self-drive, but have a manual override option—which Level 5 vehicles don’t have.
Level 5 cars don’t actually exist yet, because a Level 5 car would have the ability to operate in any and all road conditions without a human driver.
Self-driving cars at this level currently operate only in controlled environments, such as Waymo’s driverless taxi service in Arizona. Nuro also has driverless delivery vehicles.
Self-driving car accident—who is liable?
So while we don’t see Level 5 cars regularly on the road yet, we may be heading that way. But who is at fault if an artificial intelligence system causes a crash?
Forbes points out that driver liability may turn into product liability when artificial intelligence is at the wheel. This means that the vehicle operator system or whoever supplied the system may be liable.
In fact, Tesla has already faced some product liability lawsuits over accidents that involved autopilot.
Companies solving these problems
Some startups are rising to meet the challenges of self-driving car insurance, and they each have a unique approach, according to
One such company is Koop Technologies. The company is based in Pittsburg, PA and is developing an insurance platform for self-driving cars, robotics, and "machine-centric" risks, reports VentureBeat.
Koop reportedly works by collecting data from self-driving vehicle and robotics companies to use for insurance underwriting, cost of risk, and claims handling. The company says it has already partnered with large car insurance carriers to develop programs for its self-driving car and robotics clients.
Avinew, an insurtech company based in Westlake Village, CA, is working on a different approach by offering insurance coverage to drivers and fleet operators of cars with self-driving features.
The company uses a mobile app to collect
telematics data, detecting when semi-autonomous or autonomous features, like advanced driver-assist systems, are engaged "responsibly." Avinew then uses the data to see if policyholders are eligible for discounts on premiums.
Another startup, Trov, based in Danville, CA, ensures the ride-hailing customers of Alphabet-owned driverless car company Waymo. But passengers don’t actually pay for coverage—it is underwritten by an affiliate of reinsurer Munich Re.
Watch out for the future of self-driving cars
Well-known companies have also reportedly taken steps to adapt to changing technology as well. For instance, VentureBeat points out that State Farm and Ford completed a yearlong pilot last year to better understand how semi-autonomous capabilities impact car insurance claims.
But some car insurance companies say there is insufficient data to start trusting self-driving cars. Self-driving cars would also most likely have expensive parts that would be difficult to repair and replace. For example, the AAA estimates that the sensors could increase the price of a repair by $3,000 according to VentureBeat.
It will certainly be interesting to watch over the next few years if the technology for self-driving cars evolves and expands as expected.