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Change is a fact of life these days. Change in science, technology, and society is not only ongoing and continuous, the pace of change seems to increase each year. Regulators struggle to keep up with developments; insurance companies struggle to rapidly adapt insurance policy forms, or develop new policies, to cover newly arising risks. Here are just some examples of current and developing issues:
- Uber and Lyft: regulations and insurance policies that are designed for cabs and livery companies don’t work for these new transportation options. An individual who wants to make few bucks driving for Uber usually wouldn’t buy a commercial auto policy, and of course their personal auto policy excludes commercial use of the vehicle (and probably has woefully inadequate limits). Regulatory response and insurance solutions are coming into focus, driven in large part by the fact that people like these services.
- Autonomous vehicles: There is a lot of research going into self-driving vehicles. When one crashes, who’s liable? The driver (who wasn’t driving)? The owner? The manufacturer? The software developer? Lots of questions here, and few answers at present as law and insurance try to figure out these issues.
- Drones: All current liability policies exclude aircraft claims. Question: Are drones aircraft? That term is not defined in current policies. If a drone falls on someone’s head, is any resulting claim covered? How are they regulated (the FAA has been slow to respond here)? How about breach of privacy issues?
- Airbnb, HomeAway, VRBO: Vacation rental and accommodation websites are proliferating, and a lot of homeowners with a spare bedroom are using them for a little side income (or more). Same situation as with Uber; standard homeowners policies don’t cover commercial activities.
- Lemonade: Google it. Homeowners insurance as a commodity, available with an app on your smartphone. Loads of issues here that regulators are slow to address.
We could cite other examples, but you get the picture. Changes in risk and new laws, precedents and insurance policies used to evolve at a much slower pace, but the rate of change these days is considerably faster. Don’t for a moment assume that old forms of insurance automatically adapt to new scenarios like those described above, or others. We have solutions and products available to address these changes – contact us for more information.