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What the rise of robotaxi means for your car insurance

By Gavin Gibbon
autonomous vehicle AV accident cruise self-drive taxis Bob Daemmrich/Zuma Press
Cruise AV taxis in Austin, Texas: the company had to pay $8m earlier this year to someone struck by one of its vehicles
  • Possible reduction of accidents
  • Data driven risk assessment
  • AVs are vulnerable to cyberattacks

As the Middle East continues to test autonomous vehicles, the big issue is the potential increase in multi-million-dollar lawsuits as a result of AV accidents, and the debate over who is liable for such payouts.

Cruise, which is owned by General Motors and has been designated as the exclusive robotaxi service provider in Dubai until 2029, reached an $8 million-plus settlement earlier this year with a pedestrian in San Francisco who was struck and dragged 20 feet by one of its driverless taxis.

Dubai aims to deploy 4,000 self-driving taxis across the emirate by 2030, making it the first non-US city to commercialise Cruise’s autonomous cars. 

“Determining liability for an AV accident is a complex issue,” says Yury Kornitsky, a principal at Kearney Center for Advanced Mobility, part of the global management consulting firm Kearney.

“We need to consider various factors like the level of automation, the specific circumstances of the accident, and the legal frameworks in place.”

This week it was announced that Chinese self-driving tech startup WeRide has signed a deal with Uber Technologies to bring its autonomous vehicles onto the Uber platform, beginning in the UAE.

A dedicated number of WeRide vehicles will be made available to consumers using the Uber app, with the launch pencilled in for Abu Dhabi later this year.

Estimates for the current worth of the global autonomous vehicle market vary widely, from $51 billion, according to India’s Zion Market Research, to $158.31 billion, so says Precedence Research from Canada. Estimates for future growth range from $80 billion by 2030 to $2.7 trillion by 2033.

In 2023 the UAE cabinet approved the first preliminary national licence for self-driving cars, granting it to the Chinese company WeRide, as part of efforts to transform the country’s transport sector.

In the same year the Estonian company BaseTrack launched its autonomous truck in the UAE, working in partnership with the Ras Al Khaimah Economic Zone to tackle the driver shortage that was hurting local transport companies.

A law introduced in Dubai in 2023 prohibits the driving of any autonomous vehicle in the UAE unless a licence has been issued by the Roads and Transport Authority (RTA).

The law specifies certain conditions for obtaining a licence for an AV, including that the vehicle passes a technical examination conducted by the RTA and meets safety and security standards set by them.

There are six different classifications of AVs, ranging from zero for no automation through to level five, which is full-driving automation.

“From level four onwards, liability will shift to the vehicle itself, as they will have no driver, so insurance products must change accordingly,” says the Society of Automotive Engineers.

The widespread adoption of AVs is expected to reduce accidents by up to 90 percent, Kornitsky says, leading to fewer claims and lower premiums for consumers.

“Insurance risk assessment will become data-driven, focusing on the vehicle’s technology and performance rather than traditional metrics like driving history or demographics,” he says.

“In level five automation, where vehicles are designed to operate independently in all driving conditions without any human intervention, liability will be on the manufacturer, software provider, component manufacturers, or even on the services provider,” Kornitsky says.

The global self-driving car insurance market was valued at $22 billion in 2022, and is projected to reach $88 billion by 2032, growing at a compound annual growth rate of 15.3 percent from 2023 to 2032, according to Allied Market Research.

Avinash Babur, founder and CEO of InsuranceMarket.ae, says: “While AVs promise to reduce accidents, collisions are still possible due to system malfunctions, interactions with human-driven vehicles, or unexpected scenarios like road debris. Motor insurance will continue to cover these situations.”

As AVs rely heavily on complex software, sensors and network connections for navigation and communication, they are also vulnerable to cyberattacks.

This can include hacking and remote control to data breaches and supply chain vulnerabilities, according to Haider Pasha, a chief security officer at Palo Alto Networks.

“There are also tracking and surveillance concerns, and the potential for hackers to target cloud and backend systems to disrupt navigation, updates and other functions,” Pasha says. 

“We are also likely to see ransomware attacks, with vehicles locked until payments are made – with likely frightening consequences.”

AGBI contacted Cruise for comment.

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