The UK’s First Personal Insurance Policy for ‘driverless cars’: Too early or just in time?
Yesterday, we received a press release announcing the launch of a new insurance proposition targeted at personal use for ‘driverless cars’ from Adrian Flux in the UK. This news arrives hot-on-the-heels of the Queen’s Speech last month that announced the UK Government’s intention to go beyond its current ‘driverless’ trials in selected cities and legislate for compulsory inclusion of liability coverage for cars operating in either fully or semi-autonomous mode.
As the press release suggests, this may be the world’s first policy making personal use of driverless cars explicit in its coverage (we haven’t been able to validate this yet). Certainly, up until now, I suspect that most trials have been insured either as part of a commercial scheme or, as Volvo indicated last year, by the auto manufacturer itself or trial owner.
What I find particularly interesting about this announcement is that they have laid the foundation for coverage in their policy wording and, in doing so, been the first to set expectations paving the way for competition.
Key aspects of the coverage (straight from their site) include:
- Loss or damage to your car caused by hacking or attempted hacking of its operating system or other software
- Updates and patches to your car’s operating system, firewall, and mapping and navigation systems that have not been successfully installed within 24 hours of you being notified by the manufacturer
- Satellite failure or outages that affect your car’s navigation systems
- Failure of the manufacturer’s software or failure of any other authorised in-car software
- Loss or damage caused by failing when able to use manual override to avoid an accident in the event of a software or mechanical failure
Reflecting on this list, it would appear that coverage is geared more towards the coming of the connected car rather than purely being a product for autonomous driving. Given recent breaches in security of connected car features (the most recent being the Mitsubishi Outlander where the vehicle alarm could be turned off remotely), loss or damage resulting from cyber-crime is increasingly of concern to the public and the industry at large - clearly an important area of coverage.
Given the time taken to legislate, uncertainty over exactly what the new legislation will demand, and then for the general public to become comfortable with autonomous vehicles, I suspect that it may be quite a few years before a sizeable book of business grows. Often, the insurance product innovation is the easy part – driving adoption up to a position where it becomes interesting and the economics work is much harder.
Maybe this launch is a little too early? Or maybe it's just-in-time? Regardless of which one it is, in my opinion, this is still a significant step forward towards acceptance. I also suspect that some of these features will start to creep their way into our regular personal auto policies in the very near future. I wonder who will be next to move?