Toronto Insurance Companies
Driverless cars may be the future, but insurance companies still need to assess their risk.
According to predictions from American insurance broker Aon Plc — recently quoted in the Washington Post — U.S. auto insurance premiums will drop more than 40% once society fully adopts the use of automated vehicles by 2050. In theory, roads will become safer when computers do the driving.
But in Canada, insurance companies are taking a more cautious approach.
“When it comes to driverless cars, insurers will need to assess the risks and determine products and pricing based on those risks, ” said Andrew McGrath, spokesman for the Insurance Bureau of Canada.
“Our industry is becoming increasingly information-based, technologically connected and even more globalized. A competitive market sparks innovative products and solutions.”
At the beginning of the year, Ontario became the first province in the country to allow testing of autonomous vehicles. The City of Stratford hopes to be the first live testing ground.
“While testing is underway in Canada, a functional and available driverless car is a ways out on the horizon, ” McGrath said. “That being said, the insurance industry is always there to identify new risks and provide the needed coverage. But for now, car manufacturers are racing to improve safety.
“Emerging technologies could lead to ‘zero fatality’ roads, ” he added. “We already see high-end vehicles that warn you (when you) drive too close, alert you to vehicles in your blind spot, and even park themselves.”
Released earlier this year, the Insurance Institute of Canada’s report, Automated Vehicles — Implications for the Insurance Industry in Canada, found that over the next decade and into the future, vehicle automation will shift responsibility for collisions to a mix of driver error and vehicle failure.
“The issues emerging as a result of vehicle automation will present many challenges for the insurance industry, regulators, and other stakeholders, largely due to the expected speed of change. Much preparation needs to be completed in a short period of time, ” the report states.
Recommendations from the report include informing drivers and other stakeholders about the importance of insurance protection for all vehicles — including driverless cars — and the correlation between the price of insurance coverage and the cost of claims paid.
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