As technology evolves, traditional auto insurance may be a thing of the past. The rise of autonomous vehicles (AVs) will likely drastically reduce or effectively eliminate vehicle collisions. With a high level of connectivity, AVs will be particularly vulnerable to cybersecurity issues and risks, and insurers must shift focus to address concerns of the ever-changing technology. In their Daily Journal article “It’s the end of the [Automobile Insurance] world as we know it,” Attorneys Laurie Lo and Patice Gore discuss ownership, maintenance and use of AVs. The article outlines how sophisticated hackers have used a vehicle’s connectivity to control them, which can have dangerous effects.

Lo and Gore explain that the cybersecurity risks associated with the ownership of an AV differ greatly from the risks of a conventional vehicle. Ownership of an AV can expose the owner, and its insurer, to increased liability and costs as a result of a cyber-attack. Therefore, maintenance of AVs is a critical issue. AVs are primarily operated by a computer, but, “If an owner fails to update the software, the AV may be susceptible to a cyber-attack,” Lo and Gore write. However, the software update could actually be used as a way to conduct a cyber-attack. Consequently, the simple act of maintaining the AV may in fact create cybersecurity liability.

Even when the vehicle is properly maintained, writing insurance policies for AVs may be a challenge. Both owners and insurers should consider the first and third party coverages needed to fully address a potential AV cyber threat.

Originally published in the Daily Journal.