Insurance for driverless cars

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Insurance for driverless cars

Driverless cars are yet to hit UK roads, but there's already talk of how they're likely to change car insurance. Check out our guide to automated vehicles and the impact they could have on insurance premiums in the future.

What are driverless cars?

Driverless cars are vehicles that don’t require a driver. Instead, an artificially intelligent (AI) computer is programmed to take the wheel and get you safely to where you need to be. Driverless cars are sometimes known as autonomous vehicles (AV). Self-driving cars could enter the UK market as soon as 2021. 

What are the benefits of driverless cars?

It’s hoped the introduction of driverless cars will bring a number of benefits, not least a huge reduction in road traffic accidents and fatalities.

It’s estimated that most road accidents are caused by human error. Driverless cars could potentially save many lives.

The production of driverless cars and related technology could also give a much-needed boost to the UK car industry and economy. It’s estimated that the connected and autonomous vehicles market could eventually be worth billions to the economy.

Other potential benefits include:

  • less congestion
  • improved mobility for elderly and disabled drivers
  • a reduction in road traffic accidents could result in less claims by motorists and potentially cut the cost of car insurance premiums in the future

Read our report on the potential impact of driverless car technology on the motoring industry in the future.

Are driverless cars safe?

With  the majority of car accidents attributed to human error, automated vehicles are being hailed as a safer mode of transport. But they are not 100% safe yet. In March 2018, a woman was killed by a self-driving Uber in Arizona, USA, as she crossed a road.

Studies in both the UK and the US have suggested that just over 70% of people don’t trust the safety of autonomous vehicles.

They may be right to be worried, as a widely reported study from the University of Southampton found that, on average, drivers of autonomous vehicles take five times as long to respond to emergency braking, compared to drivers of manual vehicles. The study in a simulator found that it takes drivers anything from 1.9 seconds to 25.7 seconds to take over the controls, even when the drivers aren’t distracted by ny non-driving tasks.

According to current UK law, a person must be in the driver’s seat and remain in control of the vehicle at all times, even if their car has semi-autonomous or highly assisted driving capabilities. But this could be about to change.

The Law Commission is in the middle of a consultation about how the law should work around automated vehicles in the UK. It has completed its preliminary consultation paper and is now analysing the responses to the paper. It’s due to deliver final recommendations by March 2021. 

Frequently asked questions

How will driverless car insurance work?

They might not be common on UK roads yet, but the Government has already passed the  Automated and Electric Vehicles Act 2018, outlining regulations for the insurance of driverless cars. 

The bill states that insured automated vehicles will be covered for accidents that happen while the car’s artificial intelligence (AI) is driving. If they’re not properly insured, the car’s owner will be liable. 

The bill is also specific about the car’s software. Insurance will be void if car owners make certain tweaks to the software, or if they don’t install what have been described as ‘safety-critical’ software updates.

Insurance providers will more than likely consider different levels of automation when quoting for driverless car insurance. According to the Society of Automotive Engineers, there are  five levels of car autonomy:

  • Level 1:  only one aspect of the car is automated. This includes auto cruise control and lane-keep assistance.
  • Level 2:  a computer controls multiple functions but the driver is ultimately in control. This includes self-parking features and lane-change mode.
  • Level 3:  a ‘conditional automation’ mode, where the car can drive itself, but a human driver must be ready to intervene.
  • Level 4:  a car that drives itself within a specific ‘geofenced’ area. For example, a city that’s been mapped out with 3D tech.
  • Level 5:  a fully self-driving vehicle that’s totally in control and can drive anywhere by itself. 

How would I insure a driverless car?

At the moment, it’s a bit of a guessing game. Although legislation has been drafted, there are some laws that still need to be agreed – such as criminal and civil liability in the case of accidents.

Tests are still underway to see how driverless cars actually perform on the road, so it will be a while before we see them out and about. Once the cars are legalised though, insuring one should be fairly straightforward.

It's likely there'll be  one driverless car insurance policy  to cover all automated use (where it’s legally permitted). Insurance providers will probably cover the cost of accidents that couldn’t have been prevented by the driver, due to a failure of the car’s systems. 

It's likely there’ll also be a section of the policy that covers software issues caused by either manufacturing faults or malicious damage.

At the moment, there aren’t many insurance providers who offer driverless car insurance. But as the technology becomes commonplace, this will change.

How much will it cost to insure a driverless car?

It’s impossible to say until driverless cars are fully legal on UK roads.

It's possible, however, that self-driving cars might  cut insurance costs  for car owners. Avoidable accidents account for around 94% of all claims. It's thought that reducing human error will lead to fewer accidents. If that's true, insurance providers will probably reward owners with a reduction in their premium.

What do I need to get a car insurance quote?

You can’t compare driverless car insurance with Compare the Market yet. But we can help you find a great deal on your regular car insurance. You’ll need to give us some information about you and your vehicle, including:

  • your age, address and job title
  • your car’s registration number, make and model
  • proof of your no-claims bonus
  • your driving history, claims and any driving convictions
  • additional drivers you wish to add to your policy

Once we have the information we need, we’ll be able to send you a list of suitable quotes to compare.  

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What our expert says...

“As with hybrid and electric technology, driverless cars may initially be more expensive to purchase and repair. This could mean that in the short term they may cost more to insure.

“But if their popularity grows and if driverless technology really can improve road safety, drivers of the future could be rewarded with lower premiums. In the meantime, see if you can save on your car insurance by shopping around comparing quotes through us.”

- Dan Hutson, Motor insurance expert