Robert Cordray published an interesting little piece about the implications of autonomous vehicles on insurance companies (see full article here). To be honest I really think he has it wrong. The fact insurance companies may need to change their risk and pricing models really should be the last thing anyone is worrying about at this point. The insurance companies will gladly insure new risks associated with autonomous vehicles with lots of legal expertise and healthy justification of their profit margins.

Insurance companies pay people to examine thousands of risk factors and to adjust the risk models based on the projection of insurable claims. Just because the insurance companies may not be doing this today, doesn’t mean that they are going to get caught with their pants down when driverless cars start hitting the market. As this is still a technology in development, the risk factors that are evident today will not be the risk factors that are evident tomorrow. Besides, the insurance companies have an easy out which is simply not to insure the risk until they are ready.

What is likely to be more worrisome is what are all the policing and city officials going to do when their municipal revenue sources from traffic offenses drop by 70% because people aren’t speeding as much, failure to signal, tailgating, dangerous driving, etc. If an autonomous car doesn’t speed, doesn’t park illegally, doesn’t do any of the hundreds of little odds and ends that municipalities typically offset their budgets based on, then what will there be left in order to tax people who drive.

Afterall, in many municipalities, traffic offenses are essentially a tax with police and other by-law officials having to fulfil quotas each month. Don’t believe me? Come look at the 3-way stop 2 blocks from my house at the end of each month and watch exactly how many unnecessary tickets are given out to people who are driving perfectly safely but are getting nailed on a technicality.

Police have no ticketing quotas my ass – but I digress.

The court system is likely going to experience some interesting dynamics once someone gets behind the “wheel” of one of these autonomous vehicles and is in an accident. Many questions are going to arise such as:

• Is an accident the fault of the owner of the vehicle or of the manufacturer?
• What constitutes distracted driving if the car is driving itself?
• Can people without a license “drive” one of these vehicles if they are meant to be pilotless?
• If someone is on medication, or drunk, or injured (on the way to hospital) and in one of these vehicles would it still be considered an offense?
• Would autonomous cars used as part of a time-sharing arrangement still be considered personal transportation or a taxi service?
• Do you still need to tip “the driver” for pizza if the vehicle just shows up in your driveway with your pizza in the back of the vehicle but no driver? (Wall-e / Uber Autonomous Pizza Delivery anyone?)
• Would blacks and minorities still get pulled over 3x as often as white people when driving one of these vehicles? Can someone truly be called a suspicious driver if they aren’t the one driving?
• Will police, fire, ambulance, and military services have the option of being able to direct autonomous traffic out of their way in response to an emergency?
• Will it become illegal to manually drive a vehicle if more than 70% of the other vehicles on the road are autonomous?
• Will speed limits finally be increased to what traffic actually drives when human factors are removed from the equation? For example on Ontario’s 401 highway, 120 Km is the norm whereas anyone doing the posted speed limit of 100 km is actually more of a danger on the road as they are not keeping up with the traffic around them.
• Will an autonomous vehicle know enough to increase or decrease speed depending on what traffic is doing around them regardless of the posted limit? For example, if the road ahead has black ice and most vehicles have slowed down to compensate, will an autonomous vehicle know enough to not increase speed even though there may be nothing in front of it.
• Would the state have the right to monitor and track vehicles in real time and what happens to that data after the state has decided to archive it for whatever purposes?

Each of these and other questions raise substantive social and culture questions which will eventually need to be addressed, likely over the course of 10-20 years once these types of vehicles hit the market. Issues will arise of personal freedom, the right to self-determination, state control over an individual’s movements, personal verses corporate responsibility. It is all well and good that there are people out there that feel they need to look after the insurance monoliths that will take advantage of our lack of understanding of these and other issues. However to suggest that this in anyway should represent anything that resembles the ‘big picture’ view belies the complexities of exactly how disruptive this technology is going to be to just about every facet of our lives.

The only facet that really won’t change in any substantive way will be the role of the insurance companies.

— Kevin Feenan