By  | The Telegraph

Driverless cars could be on our roads within the decade. Some of the technology is already out there, from automatic brakes to cruise control to warnings when a car drifts out of its lane.

But if the idea of travelling at 70mph in a vehicle controlled by a computer, rather than a person, scares you, it shouldn’t. An estimated 90pc of road accidents are the result of driver error. Eliminate the driver, and you eliminate the error – or so the theory goes.

But that begs the question: if the risks of driving are removed, will there be any need for motor insurance?

The development of this new technology has certainly given the industry pause for thought. This week Britain’s largest motor insurer, Direct Line, described driverless cars as an emerging risk which could have “a major impact on the size and nature of the insurance market and the role of insurers”.

So, what does a future of driverless cars hold for the UK’s insurers?

Safer roads

New technology is already having a drastic effect on road safety.

Autonomous emergency braking (AEB), which stops the car before it hits another vehicle or pedestrian if the driver does not respond in time, has been proven to reduce low speed accidents by 20pc. And fewer accidents lead to lower premiums.

“Premiums always reflect the risk,” said Malcolm Tarling from the Association of British Insurers (ABI). “If the development of the technology shows significant impact and reduces risk and makes vehicles safer, then that of course will be taken into account by insurers.”

A drop in premiums might seem like bad news for motor insurers, but companies are spinning it as a new opportunity.

Direct Line chief executive Paul Geddes said driverless technology like AEB was “a good thing and will reduce accidents”.

“We want to be the insurer of choice for those types of cars, we want to be ahead of the curve. Insurers can sometimes be slow to react to these sorts of things.”

Who is responsible?

As the car gains more autonomy, the driver’s role becomes more like a pilot’s, monitoring the system and manually overriding the controls if necessary. Liability still rests ultimately with the driver.

But what happens when you cede control fully to the car? It sounds like science fiction, but in time fully automated cars with no steering wheel could be cruising down our road network.

You might have time to do other things while in the car

With no individual in control of the car, it would be left to the courts to decide who is liable if an accident happens. Is it the manufacturer? The software developer? The person who serviced the car?

A Department for Transport report earlier this year said the Government would work to provide “greater certainty around criminal and civil liability in the event of an automated vehicle being in a collision.” Until then, these are all questions for insurers to consider.

The danger of hacking

While the risk from human error will decline, automation brings new risks from larger scale threats. For instance, experts have warned that driverless cars could be hacked by terrorists.

Wired magazine has even demonstrated how hackers could cause chaos. It showed how two security researchers were able to take control of a Jeep remotely and disable its engine and brakes.

That causes another liability headache for insurers. Simon Baker, head of commercial motor insurance at Axa, which is involved in testing driverless cars in the UK, said in this kind of situation, the insurer might have to pay out and later try to recover the costs.

“If you could prove that the manufacturer had been negligent, because the software is not as capable of resisting hacking as it could have been, then they may be held responsible,” Mr Baker said.

The future

There are different ways the insurance industry could adapt to accommodate driverless vehicles, but no simple option.

“We could pass the liability straight to the manufacturer, but cars are complex things. It will not necessarily be the named manufacturer that created the part or the software that caused the accident to happen,” Mr Baker explained.

If and when fully autonomous vehicles hit our roads, one way to overcome the technical difficulties of insurance is to cover the vehicle, rather than the driver.

That would not necessarily mean one flat premium rate for every car owner. “It may be certain insurers would feel more comfortable with certain types of vehicle, or it may be that an old vehicle might be viewed as more risky or less risky,” Mr Baker said. “But it would no longer matter about the driver because there would not be one.”

Another option would be a government tax on autonomous vehicles to make sure every car is insured.

Whatever happens, as cars become more advanced, there will be a period when different insurance systems operate alongside each other, with autonomous and manual vehicles both using Britain’s roads.

Road accidents could become a thing of the past.

Source: The Telegraph


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