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Driverless cars and technologies could make cars cheaper to insure

Tristan Honeywill

Insurers and car companies are already discussing what driverless cars will mean for insurance costs and liability. When you look at manufacturers such as Audi and its self-parking car that finds its own space, it’s clear that the technology is maturing. A key question for many people will be whether they reduce the risk of accidents and if they will make cars cheaper to insure.

Fully driverless cars are going to happen gradually. We’re going to see a growing number of technologies making the most of the sensors fitted on new cars to improve safety, reducing risk and costs for insurers. Autonomous Emergency Braking (AEB) already reduces insurance premiums for vehicles that fit the technology as standard. Self-parking cars will become more common. We’ll move towards Queue Assist cruise control systems and then perhaps automated driving on some roads.

park assit

Matthew Avery, Head of Research at Thatcham, the UK insurance industry’s research and testing organisation, says that with so many new models getting additional capabilities, insurers are getting a headache trying to predict what these things will mean for underwriting. “It’s going to be difficult to measure the effect,” he says. “If there are 100 different systems out there and they can see crash rates coming down, it could be heard to see which is having the effect.”

In the past, the insurance industry has had the luxury of time. Airbags get fitted to new cars and five years later they have a clear picture of the effect on injury claims. Technology is moving much faster now and so must the process of understanding which technologies are just good for comfort, but not for safety.

“Thatcham is part of a strategic group looking at the future of Euro NCAP’s safety assessments,” says Avery. “We’re trying to identify the technologies that are going to make a difference. These will give us the next five years of developments in test procedures.”

Euro NCAP won’t look at parking technologies as there’s no threat to life, but Thatcham will. Something like 25-30% of insurance claims involve a parking manoeuvre.

“Autonomous parking technologies are something that insurers will be watching in the next couple of years,” says Avery. “We need to understand how we’re going to assess them. At the moment there are no data and no standards, but so many accidents happen at low speed due to driver error. If you’ve got sensors on the car that can prevent you from doing something stupid or just take the pain out parking, that has to be better.”

“Autonomous parking technologies are something that insurers will be watching in the next couple of years”

Matthew Avery,
Head of Research at Thatcham

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