Driverless car insurance
5 minute read Published on May 13, 2025 by BrokerLink Communications
With artificial intelligence becoming more prominent in our everyday lives, autonomous vehicles are not far behind. This naturally raises several questions and concerns for vehicle owners, especially when it comes to car insurance and how insurance companies will navigate insurance regulations for self-driving technology.
What are self-driving cars?
When it comes to autonomous cars, self-driving technology can be categorized into five different levels, which essentially determine how much control the driver has over vehicle activity. Here's a breakdown of each:
- Level 1 driver-assisted: Automatic braking and cruise control are available. However, only a single automation can be controlled at a time.
- Level 2 partial automation: While the driver still needs to control certain aspects of the driving experience, two systems can occur at a time, such as acceleration and braking components.
- Level 3 conditional automation: The vehicle is able to operate autonomously under certain scenarios. However, when notified, drivers are required to take over control, such as when physical hazards appear.
- Level 4 high automation: Under ordinary circumstances, the car can run autonomously and does not require its driver to react to a warning to come to an appropriate stop. While it can mainly drive itself, the driver has to take over in certain circumstances.
- Level 5 full automation: This is a fully autonomous vehicle and can operate on public roads with no need for human driver intervention.
Are autonomous vehicles allowed on Canada's roads?
In Canada, self-driving cars are currently legal in Ontario and Quebec. In these provinces, residents can purchase between a level 1 and level 3 self-driving vehicle without enrolling in a provincial pilot program through the Ontario Ministry that enables certain individuals to test out certain level 4 and level 5 automated vehicles in the future. For those with self-driving cars in these provinces, standard car insurance will cover these vehicles.
In other provinces like British Columbia, autonomous vehicles are not allowed on public roadways. They also do not qualify for standard car insurance.
Are self-driving cars safe?
So, are self-driving cars safe? With the widespread adoption of autonomous technology in the future, the safety concerns surrounding driverless vehicles are valid. While self-driving vehicles are technically safe, new risks like cyber security standards, along with ethical and legal concerns, come into play.
Before automated technology is completely adopted into our society, new legislation and an insurance industry standard will need to be developed to oversee this type of product liability. Brush up on safe driving tips from BrokerLink!
Who is to blame if a self-driving vehicle is involved in a car accident?
Human error, traffic congestion, distracted driving, driver negligence, loss of traction control on frozen roadways, and more are all common causes of collisions. When a car accident occurs, who is at fault is determined during the claims process. Depending on the circumstances of the collision, fault can be attributed to one vehicle alone, or shared fault can occur between one or more other motorists.
So, what about automated vehicles? When you remove driver error from the equation, how will insurance companies determine who is at fault when driverless cars get into collisions? It's safe to say that these types of liability claims are going to have tricky insurance implications. When it comes to the Insurance Bureau, they'll need to decide whether the vehicle manufacturers are responsible for the product malfunction or whether a special sector needs to be developed to facilitate liability claims.
How will autonomous vehicles affect auto insurance?
With this type of artificial intelligence, there are several ways self-driving cars will disrupt provincial insurance laws and insurance rates. For example, because this new technology is more expensive to replace, insurance providers will likely pay more during insurance claims. As a direct result of this, you can anticipate car insurance premiums to increase.
Now, in terms of actual insurance policies, there may need to be a single insurance policy and unique car insurance deductible that encompasses self-driving cars. Insurance companies will also need to take into account technology and cyber security standards when it comes to liability.
If I get into an accident in an autonomous vehicle, will I need to report it?
If you've never been involved in an accident, you may have some questions about what to do if you're in a car accident, especially if you get in one while in an autonomous vehicle in the future. Regardless of the circumstances, it's important to note that calling insurance after a minor accident is still recommended as it can help pay for repair costs and other expenses. Another thing to note is that should traffic laws remain the same in the future, reporting a car accident is legally required when certain parameters of the collision are met. However, these parameters can vary between provinces. Not reporting a car accident can lead to serious consequences such as fines, demerit points on your licence, a licence suspension, and a criminal charge for leaving the scene.
Are self-driving cars safe?
Self-driving cars do have the potential to be the safest cars and safest SUVs on the road by improving roadway safety and reducing human error, which is a major contributing factor to accidents. However, difficulties remain, such as unexpected events and hacking attempts. To ensure autonomous vehicles remain safe, Federal Vehicle Safety Standards will need to be implemented in the future.
How much would a driverless car cost?
While there are some driverless vehicles currently in the United States, these cars are mainly used for ride-share purposes, making it difficult to determine how much motorists in Canada can anticipate spending on driverless cars. That said, we can imagine them costing more than a standard electric vehicle, given the advanced technology used to operate the vehicle itself.
What are the benefits of an electric car?
If you're in the market for a new vehicle, you may have to wait a bit longer before driverless cars make their way to Canada. That said, there are many good things about electric vehicles that can make purchasing this type of car worth considering. One of the main benefits of electric vehicles is that they are extremely energy-efficient. And, because there is no combustion process involved in powering electric vehicles, they emit fewer greenhouse gases, which is better for the environment. Further, because there are fewer moving parts in electric vehicles, they require less maintenance, like oil changes, compared to traditional gas-powered cars.
Are electric cars worth the investment?
So, are electric cars worth it? There are numerous benefits to owning an electric vehicle, and if you're looking for an eco-friendly alternative to gas-powered cars, an electric one can be a great option. That said, electric cars aren't for everyone. It comes down to your driving habits, where you live, and what your budget is. Before purchasing any vehicle, we suggest comparing costs, pros, and cons. You may also want to take a couple of different electric cars for test drives to see what the driving experience is like.
Will autonomous vehicles be vulnerable to hacking?
In theory, yes, driverless cars will be susceptible to hacking, given that they rely heavily on networking and other software. This is one of the major challenges those in the driverless vehicle industry will need to navigate in order to make these types of cars safe for humans. There's also the need for stringent cybersecurity regulations for this type of technology and tailored car insurance.
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