Self-driving car insurance

Key points

• Self-driving cars, also known as autonomous vehicles, operate without human input using technologies like sensors, cameras, AI, and machine learning to safely navigate roads

• Autonomous driving technology is categorised into six levels, from 0 (no automation) to 5 (full automation), with varying degrees of human intervention required

• Insurance for self-driving cars is evolving, focusing on the reliability of AI systems and facing challenges in determining liability, with experimental models being tested to address these issues

What is a self-driving car?

A self-driving car, also known as an autonomous vehicle, operates independently of human input. These vehicles are equipped with advanced systems for environmental perception and decision-making.

The development of self-driving cars started in the mid-20th century and has evolved significantly since then. Today, they incorporate a mix of technologies such as sensors, cameras, artificial intelligence, and machine learning.

These technologies enable the vehicles to navigate roads safely. They help in understanding traffic conditions, detecting obstacles, and managing driving tasks like steering, braking, and accelerating.

How do self-driving cars work?

Self-driving cars have installed sensors and cameras that continuously scan the environment as they collect data from road signs, traffic signals, obstacles, and other vehicles.

This data is processed by sophisticated software and algorithms. These systems interpret the sensory information to understand the surroundings. They make decisions and navigate roads safely. The software calculates the car's speed and the distance to obstacles, adjusting the path as needed.

At the core of self-driving cars is artificial intelligence (AI). AI enables these vehicles to learn from vast datasets and improve over time. It mimics human cognitive functions.

AI allows self-driving cars to make complex decisions in real-time. These include identifying pedestrians, predicting other drivers' actions, and choosing the safest route.

What are the levels of autonomous driving in driverless cars?

Autonomous driving technology is divided into six levels, from 0 to 5. Each level indicates the car's ability to drive itself without human input:

Each level's current legal status in the UK varies. Fully autonomous vehicles (levels 4 and 5) are still under trials and regulatory review. Levels 0 to 3 are already on the roads, with specific regulations ensuring safety and compliance.

How will self-driving car insurance work?

While drivers will still need standard car insurance with a self-driving car, the focus will be more towards insuring the car's technology and its potential failures. Insurers may also adapt their policies to cover cybersecurity threats like hacking or software glitches.

Self-driving car insurance policies will likely shift liability from the driver to the manufacturer or software provider in certain situations, particularly when the vehicle is in autonomous mode.

How much will it cost to insure a self-driving car?

While the cost of insurance for self-driving cars is still uncertain, it's likely to be influenced by factors such as:

• The car's level of automation

• Its safety features

• The insurer's assessment of risk

Insurers may also offer usage-based insurance (UBI) policies, where premiums are based on driving behaviour and safety scores.

Tesla, for example, already offers its own insurance product that uses real-time data to determine premium.

Are self-driving cars safe?

Yes, statistically, self-driving cars often have fewer accidents per mile than human-driven vehicles, making them appear safer on paper. This is because they adhere strictly to road rules and react without human reflex delays.

However, they are not without faults. Notable incidents have raised concerns about their handling of unpredictable scenarios, which human drivers might navigate more successfully.

Safety features in autonomous cars are rapidly advancing. These vehicles are now equipped with advanced sensors and algorithms. These improvements aim to enhance decision-making and reduce accident likelihood, potentially making self-driving cars safer as technology advances.