IBC proposes single auto insurance policy for autonomous vehicles

Published: November 19, 2018



The rise of autonomous vehicles is expected to be swift as developers and manufacturers move towards full driverless cars over the coming years. Many questions surround the technology, not least in the insurance industry, where auto insurance is expected to be changed forever.

As the industry weighs up where liability will lie in the autonomous vehicle market, the Insurance Bureau of Canada (IBC) has proposed a single policy coverage. The Canadian insurance industry representative says adopting a single policy will allow more efficient liability claims processing.

“The automated vehicle’s insurer would compensate injured people if the automated vehicle caused a collision, regardless of whether the human operator or automated technology was in control,” IBC wrote in a position paper, Auto Insurance for Automated Vehicles: Preparing for the Future of Mobility, released Thursday during its annual Regulatory Affairs Symposium.

“The single insurance policy’s intent is to align the tort process for automated vehicle claims with traditional claims involving conventional vehicles.”

Alongside the single policy recommendation, IBC also proposed two other implementations that would update insurance laws and vehicle safety standards:

  • Establish a legislated data-sharing arrangement between vehicle manufacturers and vehicle owners and/or insurers to help determine the cause of a collision
  • Update federal vehicle safety standards to address new technology and cybersecurity standards.

Changing regulatory approaches across provinces will be necessary as current systems are built on human-led liabilities. Special laws that accommodate autonomous vehicles will have to be created, which will likely involve amending car insurance laws province by province.

“Currently, they are built on the notion that human error is the primary cause of collisions,” IBC said in a release. “As humans cede control of driving to automated technology, there will likely be fewer collisions, but the collisions that do occur will be caused increasingly by product malfunction. The current laws will create uncertainty and confusion for some people injured in collisions that involve automated vehicles, possibly delaying treatment for their injuries and claims payouts.”

IBC is urging insurance companies and authorities to get their house in order now to be prepared for autonomous vehicles. The question is when and not if the technology will arrive. Indeed, several major carmakers are preparing to roll out their first driverless tech during the first half of 2020.

“Automated vehicles are coming to Canada’s roads, and the laws that govern insurance and vehicle safety need to be updated to reflect this reality,” said Don Forgeron, president and CEO of IBC. “We need changes to the provincial insurance laws across the country to ensure that collision victims continue to be compensated in a timely manner.”