Annual studies of the leading causes of vehicle-related accidents are consistently pointing at human error. People are driving under the influence of alcohol and drugs, they drive while not being well-rested, and some are just not focused or skilled enough to prevent an accident. That’s why the scientists living in the age of technology are so focused on building and improving autonomous vehicles.
The first idea of a self-driving vehicle started back in 1961 with the Stanford Cart, although giants in the tech world such as Tesla, Uber, and Google have pioneered the advanced self-driving technologies of today.
Given that even autonomous cars can malfunction and cause accidents, as we’ve seen in the case of the Uber incident in 2018, insurance companies needed to adapt to the rapidly advancing technology. Today we’ll talk about insurance policies that autonomous vehicles need, so without any further ado, let’s start:
Levels of Autonomous Vehicles and their importance
Not all self-driving vehicles are equal in terms of automation. Some models are supplied with basic driving-assist features while others are equipped with advanced built-in navigation, collision evasion maneuver systems, and self-braking features.
Laws and regulations regarding car insurance policies are constantly being updated as new technologies are breaking ground; currently, there are six established levels of automation that legislative bodies are considering when revising standing self-driving vehicle laws:
- Level Zero – Non-automated vehicles. These vehicles are not considered “self-driving” in any case.
- Level One – Vehicles with drive assist features, such as steer-assist or automatic braking.
- Level Two – Partial automation. Vehicles in this category are capable of self-driving, but the driver is still required to keep a watchful eye on the dashboard.
- Level Three – Conditional automation. The driver’s culpability is lower, but attention is still required. The vehicle can only self-drive in specific conditions.
- Level Four – High automation. Vehicles can self-drive in most mapped areas.
- Level Five – Full automation. Top-tier self-driving cars that can drive autonomously practically everywhere. Drivers aren’t culpable and are legally treated as passengers.
Auto (Car) Liability
Car liability is the only mandatory insurance policy in pretty much all modern states. It is comprised of third-party injury liability, and property liability, both of which are meant to cover a fraction of expenses you may have caused to others in a car accident.
The third-party injury liability is related to bodily injuries. The property damage clause relates to damages you’ve caused to any property, such as another vehicle, or even someone’s fence for instance while driving. This policy activates when the policyholder is the culprit exclusively.
The medical payments clause is usually embedded in auto insurance, covering personal bodily injuries. In short, it encompasses nursing services, ambulance fees, surgeries, doctor visits, co-pays, and health insurance deductibles.
Given that it’s mandatory in the majority of states, the same laws are currently affecting states that allow automated vehicles to drive on the road. Regardless of the level of automation (excluding fully automated vehicles), drivers are still culpable. It’s almost certain that in the near future legislation will look more favorably on the culprits if the automation level of their vehicles is high.
Physical Damage Insurance
Self-driving cars are still imperfect. Even some of the finest models can suffer a brief system malfunction and bump into a tree or another vehicle. Physical damage insurance is not mandatory like car liability insurance, but most owners of autonomous vehicles will be likely to get one given that repairs and replacements of specific parts could cost a small fortune.
Physical damage insurance is meant to cover repair and replacement-related expenses of the car owner to a certain degree. The levels of automation do not play a significant role, although the availability and cost of replacement parts are certainly tied to the cost of this insurance.
Technological errors and omissions policy
This is one of the few policies that favor the manufacturers of self-driving vehicles instead of car owners. Electronic features of any vehicle, especially the main system, can malfunction, which could result in car accidents.
Currently, the main principles of this policy type apply to both standard and self-driving cars. However, fully automated vehicles are legally carrying passengers exclusively; the driver is not required to intervene and is not culpable should an accident occur. This policy serves as insurance for the self-driving car manufacturers provided such incidents happen.
Comprehensive coverage insurance
Comprehensive insurance policies are tied to theft, natural disasters, and vandalism. Essentially, it covers situations where the ‘culprit’ is either unknown or ‘superior force’ – an event that the car owner could neither predict nor affect.
This particular insurance includes a deductible – the amount of cash car owners will need to pay before being reimbursed by their insurance company. Although optional, this insurance type may be more important for owners of self-driving cars, as losing such a prized possession to a hailstorm (or a burglar) will be more likely than totaling a car in a road accident.
Comprehensive coverage is sometimes required by lenders, should the vehicle be leased or burdened with any unpaid loans.
The shift of liability
It’s not hard to imagine a feature when people will not need to take driving lessons and pass driving exams. Fully automated vehicles could transport people who would only need to input their desired destination and simply exit upon arrival.
As this industry welcomes more advanced technologies, so will the legal world have to shift the liability for road accidents from driver-passengers to self-driving vehicle builders.
The levels of automation are currently only cataloging the differences between simple and advanced autonomous vehicles. In terms of insurance policies, it is highly likely that insurance companies will have to take into account the automated capabilities of a vehicle before issuing a policy, which will probably result in lower fees for vehicles with high levels of automation.
Should fully automated vehicles become the new standard, some experts claim that car insurance may be rendered obsolete. Medical, technical, and comprehensive coverage policies, on another hand, would become even more prominent.
We hope that this guide was useful to you and that you have learned something new today on what insurance policies autonomous vehicles need. Make sure you are staying safe in these times we are all going through and have a good one, guys!