Insuring driverless cars – Insurance Innovation

The marriage of technology and insurance product innovation has taken another leap forward as applied to insuring driverless cars. Insurance professionals should stay abreast of developments and educate ourselves on the new technologies for the design and delivery of insurance products. In support of this mission to educate insurance professionals, I am compelled to share this Wall Street Journal article titled: Riders in Alphabet’s Driverless Car Will Be Insured by Startup Trov.  Waymo LLC, the driverlesscar unit of Google parent Alphabet Inc., is turning to an insurance-technology startup Trov to provide coverage for future passengers of its ride-hailing service.

Trov promotes their insurance product as “ON-DEMAND INSURANCE FOR THE THINGS YOU LOVE.”  You use a phone app to turn your insurance on and off so that you insure the things you care about when you want to pay for the protection.  While I know nothing about Trov today (and cannot complement or criticize), it is certainly an innovative company to watch.

Trov’s technology is applied to the Alphabet driverless car to assesses the risk for passengers for the short duration of a ride.  I view this as the next technological tier in usage-based insurance rating.  Another area to watch for technology innovating the design and delivery of insurance products is utilization of blockchain.  Perhaps more on that later.

Insurance law and insurers do not have a crystal ball to predict how liability will allocated for driverless car operations. The debate often raises the questions: Is the owner of the car liable?  Is the manufacturer liable?  Is the software engineer liable?  Is the consumer who requested the service liable? Will liability be shared?  These are all unanswered questions, but the marriage of Trov technology with car insurance shows how smart corporate risk management can be aligned with social (and legal) responsibility to provide protection for a consumer utilizing a driverless car service, to innovate a new insurance product.