AI in the Driver’s Seat? The Impact of Artificial Intelligence and Autonomous Vehicles on Auto Insurance

Jul 25, 2023

If you're a Canadian over 40, you might recall the 1960s animated TV show, The Jetsons. The show first aired in the 1960s but was set in the future years of the 2060s. The show made futuristic predictions like self-flying cars, smart homes, and remote work. While we haven't quite reached flying cars, instead we got Tik Tok, Car Lashes, and the Tide Pod Challenge. But how close are we to kicking back while our cars navigate us? And what implications does this have for Car Insurance in Canada? Let’s take a closer look into the future.

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Deeper Dive Into Autonomous, Automated, Self-Driving and Driver Assist Vehicles

As the future unfolds and AI progresses, technologies like autonomous vehicles and advanced AI chatbots such as ChatGPT are becoming increasingly relevant, transforming our daily routines and how we manage tasks, including getting an insurance quote or understanding our insurance policies. By now, we're guessing there's one big question brewing in your mind, What exactly is an 'Autonomous Vehicle’?  It turns out there are quite a few potential iterations. An entirely autonomous vehicle suggests that it is thinking for itself and is powered by AI.  For example, you might say “Hey car, drive me home”.Your car might decide against doing this and instead, drive you to a spa because it feels you are too tense and might need a massage.

 An 'Automated Vehicle' would do as directed in its programming with no surprises. There would be advantages and disadvantages to these two different technologies as you might imagine.  A 'Self-Driving Vehicle' means that the car can drive safely in most situations, but the human driver must be ready to jump in at a moment’s notice if something unexpected arises. 'Driver Assist Vehicles' implies the vehicle can help in certain situations, like parking or cruise control.

LIDAR, Radar and AI Connectivity 

Many modern vehicles today have some form of radar in the vehicle. The radar can be forward or backward facing, often located in the vehicle bumper and/or windshield and side mirrors. The radar can give indications as to objects that are approaching too quickly ahead or from the side. Often the radar can signal to the vehicle CPU to slam on the brakes or to adjust course. These would all fall under driver assist and are here today. However, most automated or autonomous vehicles will need LIDAR, which is basically radar with lasers instead of sound waves.

LIDAR is much faster and more accurate but also more expensive and not fully developed yet. Autonomous vehicles will heavily rely on LIDAR to scan their environment and react accordingly. This raises questions, with all of these lasers bouncing around could the lasers interfere with each other and give bad signals? Also with the cost of development, when will LIDAR be ready for mass production and bringing autonomous vehicles to the market? That’s not an easy question to answer. Furthermore, if your AI vehicle is taking in large amounts of data will it be sharing it with other AI vehicles on the road? How will they be connected, and should they even be talking to each other? What if they were to communicate and decide to do something different than we intended? The thought itself brings us to an interesting juncture in the discussion on AI and autonomous vehicles - a crossroad of technology, human control, and unpredictability.

Auto Insurance Liability: Driver vs. Manufacturer

But wait, what about unintended mistakes and auto insurance liability for autonomous vehicles? If a vehicle is operating in an automated fashion and causes an accident, who is technically at fault? Is the driver at fault if they were not driving? Is the owner at fault because it’s their vehicle?  Is the manufacturer of the vehicle at fault? Is the designer of the AI computer at fault for making the wrong decision? The LIDAR manufacturer or Would it be a combination of all the above? 

The consensus and the common sense answer is that the liability should not rest with the non-driving passenger if they were perhaps napping while the vehicle was supposed to be driving them to work safely. Maybe the manufacturer will insure the vehicle but how do they pass on the costs to the consumer, or do they at all? Does this all fall under the manufacturer's warranty? The debate is already occurring, and Tesla has even launched its insurance company to get ahead of this debate.

Insuring AI Vehicles and Choosing Insurance Providers

Today, you purchase your insurance from either an Insurance broker or agent. Those are your only two options. However, you can buy it by phone, online, or in person. If autonomous cars become mainstream, will insurance brokers and agents still exist? Likely, yes. Even if autonomous vehicles were fully rolled out tomorrow, the vast majority of drivers are priced out of the market for now. Even when this technology is ready for mass production, it may take another decade or two for the full adoption of this new technology. We can even anticipate that there will be segments of the public that actually prefer to drive themselves for sport, or even just for convenience. 

People might not trust automation or AI technology. And what about antique collectors?  You can expect people will still want to drive their 65 Mustang, if not their classic 2020 BMW. Chances are insurance intermediaries aren’t going anywhere and vehicle manufacturers will not turn into major insurance companies anytime soon.

When Can We Expect These Changes?

Well, with LIDAR being one of the main technologies necessary for fully autonomous vehicles, the answer is it could take some time. Although technology is advancing rapidly, it could take years, maybe even a decade or more, before LIDAR and autonomous vehicles are widespread. With Alphabet, Google’s parent company, Apple, Tesla, Chevy and others getting in on LIDAR and installing it in upcoming releases of their autonomous vehicles, the race for the self-driving car is on. And yes, you read it correctly, Apple is all set to manufacture cars now!

What Does This Mean for My Insurance Costs?

In the short term, probably not much. There won’t be enough self-driving cars on the road to decrease risk just yet. In fact, they could potentially add even more risk in the short term. In the long term, autonomous vehicles could reduce traffic congestion, reduce the frequency and severity of accidents save countless lives, increase mileage efficiency, reduce carbon emissions and improve productivity and quality of life in general. In a world like this insurance costs will come down drastically and auto insurance as we know it will become a thing of the past. Will this come to pass before the 2060’s as the Jetson predicted? The answer is quite likely. 

Until these future predictions come to life, Begin Insurance, as futuristic an insurance broker as it gets, is here to help insure your 'not-so-smart' vehicle with all of the right coverages. Happy Driving!


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Just like the future of autonomous vehicles, the journey into insurance is ever-evolving. Eager to delve deeper into the captivating world of insurance? Navigate your way to our other intriguing posts here. Let's continue this exploration together - because understanding insurance today, could mean a smoother ride tomorrow.


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