While some might find the recent announcement that Google (along with Volvo and Mercedes-Benz ) will accept responsibility for any accidents resulting from a flaw in the design or components of their self-driving cars to be sheer showmanship at this stage in their development, at least one observer feels there’s something deeper to be read into that decision.
Blake Corbet, a managing director at PI Financial Corp. in Vancouver, B.C., says this could well be the opening Google needs to wedge itself into the insurance business. Writing for the online publication Cantech Letter, he reasons, “Google’s willingness to accept full liability for accidents involving its driverless cars is, in fact, a Trojan Horse into the multi-trillion dollar insurance industry. And once we are getting our AV car insurance from Google, how long will it be before we are getting house, health, disability and life insurance from the same source?”
Already the company has a well-heeled foot in the door with its Google Compare service that allows users to check rates from 21 different auto insurance providers.
As it stands, autonomous vehicles are poised to be major disruptors of the status quo in the insurance industry because of their projected low accident rates, zero human error and full accountability for each and every of its actions. Though state insurance regulators have yet to weigh in on the possibility of automakers bypassing traditional channels to personally indemnify their customers, expect other manufacturers to step up and assume liability for their self-driving cars, at least initially as marketing tools aimed at skeptical consumers.
“The responsibility of insuring autonomous vehicles will shift from owners to manufacturers,” says Kamalesh Mohanarangam, a senior transportation analyst with the consulting firm Frost & Sullivan in London. “Moreover, insurers will develop new products for risks arising out of innovations. For instance, with the digitalization of automobiles, insurers will provide cyber cover for protection against cyber-attacks and hacks.”