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Monthly Archives: April 2016

The arrival of autonomous vehicles will upset the insurance industry

In the not-so-distant future, autonomous vehicles will be driving on our roads, as automakers including BMW and Chrysler dabble into mapping companies, a key technology in the development of automated vehicles.

With 95% of road accidents caused by human error, driverless vehicles are bound to make driving much safer. In Canada, accidents claim the lives of nearly 2,000 people annually, and injure more than 165,000.

But what does the driverless vehicle mean for insurance? The one major issue that insurers will have to address is liability. Will the manufacturer of the autonomous vehicle be responsible during an accident? What happens if the driver disables the autonomous driving system and then gets in an accident? Would the mapping software company be responsible if there was an issue with the operating system?

These are all questions that have yet to be answered and it will be interesting to see what types of regulations roll out and how insurance companies adapt.

Under Toronto City Council’s proposed recommendations, private transportation companies would need $7 million of insurance

Currently in Toronto, only taxicabs and limousines are required to carry a minimum of $2 million of collision and passenger hazard insurance. This may soon change with the Toronto City Council pushing recommendations that would require private transportation companies to carry a minimum of $2 million of collision and passenger hazard insurance, in addition to $5 million of commercial general liability insurance.

Under the new recommendations, taxis will continue to charge a city-regulated rate when a cab is hailed. Fares booked through a brokerage, either by phone or app, may be discounted by the brokerage. The recommendations also eliminate the minimum $70 per hour fare requirement for limos. Both Limos and private transportation companies would be subject to submitting an annual safety standards certificate issued by a licensed mechanic. Private transportation companies would not be licensed by the city but they must meet the same criminal background and driver screening requirements as vehicle-for-hire drivers, with records subject to audit by the city.

The proposed recommendations outlined in a report titled, A New Vehicle-For-Hire Bylaw to Regulate Toronto’s Ground Transportation Industry, are meant to provide ground transportation industries with an opportunity to develop efficiencies, allow for competition and reduce the regulatory burden.