Riders in Waymo’s self-driving cars will now be insured

Riding in a self-driving car involves a certain level of risk taking, especially in these very early days of the technology. Recognizing the need to build trust among normal people, Waymo, the self-driving unit of Google-parent Alphabet, announced it would be partnering with an insurance startup to cover riders in its soon-to-be-released driverless ride-hailing service.

Trov, a five-year-old insurance tech startup based in Danville, Calif., said it would work with Waymo to insure passengers for lost and damaged property and trip-related medical expenses. In other words, if your driverless Waymo is involved in a fender bender — or, god forbid, something worse — your robot-induced whiplash treatment will be covered.

Importantly, passengers won’t have to pay for the coverage, nor will they know that Trov is the insurer. Moreover, Waymo is Trov’s first corporate client. The startup is underwritten by an affiliate of reinsurer Munich Re, whose venture-capital arm also led a $45 million fundraising round for the startup earlier this year. The reinsurer was willing to take a risk, given the lack of data on pricing and claims history surrounding self-driving cars.

The car insurance industry is scrambling to respond to autonomous technology, with experts predicting that uncertainty about liability could delay testing, deployment, and market penetration of these vehicles. Some consultants predict that up to 80 percent of insurance premiums could evaporate over the next decade, assuming driverless technology makes automobiles safer and less prone to accidents.

Waymo is expected to launch its first commercial ride-hailing service in early 2018 in a suburb of Phoenix. The Google spinoff is already operating fully driverless vehicles on public roads, with no safety driver behind the wheel.

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