Could a vehicle’s software updates affect an insurance claim?

As driverless cars become more advanced, the world of insurance will have to keep up. It is anticipated that autonomous vehicles will be far less susceptible to error than their flesh and blood counterparts. Automated vehicles do not drink and drive, ignore speed limits, suddenly change lanes, treat traffic lights as recommendations or check their social media feeds when driving.

Autonomous vehicles will save lives. However, how will insurance claims in the future be affected by this dramatic rise in technology?

A software update is available, would you like to download?

Lion Air Flight 610 and Ethiopian Airlines Flight 302 underscore the devastating effects of a software update. The grounding of the Boeing 737 MAX involved in both incidents, wiped $29 billion dollars off Boeing’s stock value in a single day. With autonomous vehicles so reliant upon software, a single code error could prove very, very costly. Software updates are issued regularly in every tech environment.

We are all familiar with updating the software on our mobile devices and personal computers. If a vehicle owner fails to update the software on their vehicle, would this invalidate their insurance cover, regardless of whether issued by the manufacturer or insurance company? Similarly, what if the owner jailbreaks the vehicle operating system? There have been four deaths in Tesla vehicles (from Jan 2016 – April 2019), where drivers were using the Tesla Autopilot advanced driver-assistance system, in its automated driving mode.

However, the vehicle manufacturer has avoided liability via the use of driver opt-ins and expertly written service agreements. Falling fowl of the terms and conditions could render the vehicle owner liable for the incident, even if the accident itself was outside their control. In an accident between two autonomous vehicles, could one party argue that the other vehicle’s out of date software be the cause or contributory factor, even if the locus suggests otherwise?

“We need to educate motorists on the benefits of autonomous vehicles because consumer trust will be vital to their success.” – David Williams, Technical Director, AXA UK

Read our white paper here on the rise of autonomous motor technology: Where does liability lie?

School of machines vs insurance

Liability may lie with the vehicle manufacturer because the software allowed the vehicle to crash, the highways agency for approving the road for autonomous use, the driver for heading out against recommendations, or a combination of all involved. The inclusion of the passenger complicates things. The passenger might hold the vehicle owner liable for their injuries but have no actual civil legal recourse available to them.

Future versions of the software, upon learning from this event and others, will be more capable at dealing with the particular circumstances. If the software, the artificial intelligence, has not yet sufficiently grown to cover absolutely every possible accident circumstance, should it be used? And if not deployed into the real world, how will it learn from its own mistakes?

Maintenance is another factor which becomes more important than ever. Modern garages and bodyshops are increasingly sophisticated, able to diagnose issues, however, this might force vehicle owners to utilise expensive manufacturer approved facilities. The use of a non-approved garage, even for the simplest of repairs might invalidate the service agreements and render the vehicle owner uninsured.

Our white paper on this topic explores in more detail how autonomous vehicles may change the insurance industry. Check out the white paper here.