NAMIC: Auto Insurance To Evolve, Not End, In Age Of Driverless Cars
INDIANAPOLIS, April 19 -- The National Association of Mutual Insurance Companies issued the following news release:
Advances in automated driving systems are increasingly blurring the lines between who is in control, the driver or the vehicle, and this raises complex questions when something goes wrong, the National Association of Mutual Insurance Companies said today.
"Despite the hype, it will be decades before an autonomous car functions without some sort of operator, if we ever reach that point," said Jimi Grande, senior vice president of government affairs for NAMIC. "Until then, there will inevitably be times when things go wrong. There will be accidents and malfunctions, and we'll need to determine who is at fault and to what extent as drivers increasingly share the responsibility with automated technology."
In "Insurance and the Evolution of Automated Driving Systems," a white paper released today by NAMIC, Tom Karol, general counsel - federal, explores how integrating automated driving systems alongside driver-operated vehicles will affect the marketplace and the relationship between consumers and vehicles, and how insurance can continue to play a role in protecting users of autonomous cars.
"As cars become increasingly automated, the need for liability coverage will not disappear," Karol said. "In fact, a real concern is that drivers will assume that the car can or will do more than it is designed to do. With that false sense of security, drivers may actually focus less on the driving skills that are not yet automated."
Karol also cautioned that, even as manufacturers suggest that they will ease the transition by assuming liability for accidents involving their vehicles, "it is not unlikely that the actual legal commitments will contain a plethora of waivers, conditions, carve outs, exceptions, limitations, and liability caps."
For insurers, Karol sees a need to adjust how they view the autos they insure. "Autonomous car technology, usage, and business models will be disruptive for the insurance industry, as software is continuously updated, usage trends change, and better analytics are defined," he explained. "As concrete information on the potential risks of autonomous cars is collected and reviewed, underwriting policies will adapt, policies will be revisited, and pricing will be revised. There may need to be an entirely new skill set for underwriters that is more akin to an IT professional."
The insurance industry's decades of expertise in safety analysis, risk management, mitigation, and coverage will be paramount in continuing to protect policyholders, Karol added. "The seductive promises of passive users transported in complete safety ignore the hard truth that even with perfect software and hardware, crashes will happen and are likely while traditional and highly automated vehicles share the road," he said. "The future development, ownership, and operation of autonomous cars will be too dynamic to preclude the likelihood of errors, unanticipated crashes and incidents, and other insurable events."
Similarly, Grande said that NAMIC, along with others in the insurance industry, will continue to press manufacturers to ensure that vehicles meet the highest standards for safety. "From crash testing and the fight for seatbelts to the ongoing work to make our homes and communities more resilient, the insurance industry has led the way in not only helping people recover but in preventing them from suffering a loss in the first place," he said. "As we move toward vehicles that drive themselves, it will be all the more important to ensure that they are designed and built to be as safe as possible."
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