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On March 18th a transportation network company’s (TNC) self-driving car hit and killed a woman in Arizona. This crash brings up insurance questions similar to those generated by the December 31, 2013 fatal accident that first brought the issue of ridesharing and insurance into the spotlight. Transportation network companies wanted personal insurers to cover the exposure, but insurance industry trade groups believed commercial insurance should apply from app on to app off. This led insurance trade groups, insurers and TNCs to develop a compromise model bill. Since then, 48 states and the District of Columbia1 have enacted TNC legislation. It also prompted insurers to create new products for TNC drivers.
Unlike ridesharing insurance issues, there is time to develop solutions to autonomous vehicle insurance questions. Even once autonomous vehicles are no longer in testing mode and are available to the general public, it will take decades for them to dominate the roadways. The average vehicle on today’s road is over 11 years old, and that lifespan is increasing as technology improves. Enhanced technology reduces crashes, and thereby the need to replace your vehicle. Moreover, autonomous technology will start out as an expensive option before becoming a standard feature, prolonging the time before a majority of vehicles have autonomous features. Before then, regulators may need to develop guidance while insurers revise policy forms and consider developing new products. The first step may be for the insurance and automotive industries to develop another compromise model bill.
Laura Maxwell is a Senior Consulting Actuary with Pinnacle Actuarial Resources, Inc. in the San Francisco, California office. She has 30 years of actuarial experience in the property/casualty insurance industry and has provided consulting services since 2003. Laura is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries. She currently serves the Casualty Actuarial Society (CAS) as a member of the Examination Committee, Chair of the Webinar Committee and Secretary/Treasurer of the Casualty Actuaries of the Bay Area.
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