4 ways driverless cars will disrupt insurance

Risks will shift, split and eventually drop

Driverless cars will reshape the insurance industry in four significant ways, law firm Borden Ladner Gervais found in its report on autonomous vehicles.

The first step will be risk shifting, where liability will move from the driver to the manufacturer, which would then purchase policies.

Another possibility is risk slicing, where both driver and manufacturer need auto insurance, and pricing shifts depending on how many and how often autonomous features are used.

Read: Don’t over-regulate driverless cars, industry tells Ottawa

Risk slicing will also play a role when driverless cars are part of a car-sharing service, as drivers don’t rely on autonomous features for the same amount of time.

Finally, driverless cars will likely reduce risk to varying extends, which BLG said would “complicate underwriting.”

“It is possible that insurance policies will provide a base level of insurance, with a higher or lower premium charged on the basis of each trip or on the basis of the insured’s driving habits generally,” BLG wrote in the report. “In fact, policies where premiums adjust according to the operational habits of drivers, as determined and reported by in-vehicle sensors, already exist.”

Read: A driverless car Q&A

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