With driverless cars perched on the edge of becoming a reality, the ubiquitous industry question remains: Who is at fault should a driverless car figure into an accident, and what will that mean for the auto insurance industry? A number of well-known auto insurers have voiced their concerns over self-driving technology, admitting it would upset the industry.
In a speech last year, Allstate chairman Thomas Wilson famously said that the move to driverless cars could have “the most detrimental impact on auto insurance.”
Investor Warren Buffett – chairman, president and CEO of Berkshire Hathaway, which owns Geico – also said that “we would not be throwing a party at our insurance business” in the event that driverless cars are introduced.
“Anything that makes cars safer is very pro-social, and it’s bad for the auto insurance industry … if there are no accidents, then no need for insurance,” Buffett said.
Despite such skepticism, some insurers and industry experts have stepped forward to meet the challenge autonomous vehicles pose.
UK-based Adrian Flux Insurance Services recently launched what it touts as the first ‘driverless car policy.’ The product would cover drivers for situations out of their control, such as satellite failures or cyberattacks from hackers.
“We wanted to help provide confidence and clarity around the ongoing debate of who is liable,” said Adrian Flux general manager Gerry Bucke.
Beyond the simple matter of property, analysts agree that while liability continues to be a murky issue, consumers will still need insurance for damages outside of driving, including falling trees, hail, water damage or vandalism.
James Whittle, general counsel and chief claims counsel at the American Insurance Association, is not too worried, and believes driverless cars will not be too much of a problem for the industry for “the simple reason that a lot of people like to drive.”