Car Insurance Of The Future: Determining Culpability Between Self-Driving Vehicles

Despite a tremendous amount of progress on the autonomous vehicle front in the past year, the self-driving car industry can’t seem to get out of its own way.

2018 started with multiple accidents from Tesla, whose vehicles are in the purgatorial “stage 3” of self-reliance. Stage 3 vehicles technically require human interaction, but they are autonomous enough to lull drivers into complacency.

On March 18th, an Uber test vehicle struck and killed a pedestrian despite the fact that a “safety driver” was present in the car. On May 4, a Chrysler Pacifica powered by Waymo was involved in an accident in Arizona.

Much has been written about how to improve self-driving vehicles and whether or not they are safer than human drivers, but two issues remain largely below the surface:

  1. Why can’t we use blockchain technology to determine insurance rates for safe drivers?
  1. How do we determine culpability when a self-driving car is involved in an accident?

The answers lie with blockchain technology.

Determining culpability between software

Until recently, the at-fault party in an accident was usually one driver or another. Only in rare (and widely publicized) situations was a vehicle malfunction to blame. Insurance agencies would work with the drivers they insure and local authorities to determine who was at fault, and once that was determined they would pay accordingly.

However, a recent beta test between RiskBlock and Nationwide showed that using blockchain could make traffic stops faster, insurance payments distributed sooner, and fraud rendered nearly obsolete.

As a guide by Charlotte car accident law firm Dewey, Ramsay & Hunt said, insurance is a time-sensitive issue; blockchain technology could streamline the process and help both drivers and insurance agencies resolve issues faster and without fraud.

But with self-driving cars, human drivers will eventually not be at fault in any way; culpability will fall to the software programs tasked with driving the vehicle.

As in the latest autonomous vehicle accident, pundits are quick to blame Uber at large. This is naive. With so many sensors and vehicle components at work and an equal number of vendors responsible for those components, any one of them could be responsible for an accident.

The only way to accurately see who or what is at fault is to track each sensor and software component in a blockchain framework. While it wouldn’t be ethical to require Uber or different vendors to share their code with one another, a government’s transportation administration should have access to this log of activity so that when an accident occurs they (along with an insurance company) could see which system went wrong in the moments leading up to the crash.

Insuring safe drivers with blockchain technology

When it comes to recovering funds after an accident, safe drivers often get the short end of the stick, so to speak.

Even when a driver has a safe driving history, their insurance may not provide sufficient accident coverage. “While they often will cover medical bills that are necessary for your recovery, they might have policy limits that prevent recovery for all of these injuries and other financial burdens,” claims a study by Baltimore car accident attorney Bennett & Heyman.

The DAV Foundation has proposed a blockchain framework that would track the micro-movements of drivers over time (how fast they drive, for instance) and, depending on how safe they are or how low their mileage is, they would receive significantly discounted insurance.

One could argue that the only individuals opposed to such an insurance system would be high-risk drivers; while it could lead to privacy concerns, it may be the only way to efficiently and accurately determine insurance payments and payouts.

For more on how digitalization is changing the insurance industry, see Resilient No More: Insurers Face A New Reality Of Digital Disruption.

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