Hackers can seize control of cars: what it means for insurance

by Caitlin Bronson

 

Jult 27, 2015

 

Infotainment systems developed by several car manufacturers are vulnerable to a hacking attack that could put lives at risk, and – for insurance professionals – complicate liability.

Manchester-based security company NCC Group told the BBC last week that it had found a way to carry out cyber attacks on various automobiles by sending data through digital audio broadcasting radio signals commonly received through car information and entertainment systems.

The report coincides with similar developments by US researchers Chris Valasek and Charlie Miller, who earlier this month managed to hack into a Jeep Cherokee through its navigation system and control the car.

According to the researchers, such a broadcast has the power to affect multiple cars at once and create a widespread disaster.

“As this is a broadcast medium, if you had a vulnerability within a certain infotainment system in a certain manufacturer’s vehicle, by sending one stream of data, you could attack many cars simultaneously,” Andy Davis, president of NCC Group, told the BBC. “[An attacker] would probably choose a common radio station to broadcast over the top of to make sure they reached the maximum number of target vehicles.”

The ability of hackers to take over cars has long worried members of the insurance industry, primarily over any dispute in liability.

According to John Tiene, chief executive with the East Coast-based Agency Network Exchange, manufacturers as well as car operators could bear some responsibility over damages caused by a cyber intrusion. This will be particularly true if driverless cars hit the road as scheduled.

“This won’t just be a manufacturer having liability because it’s their technology,” Tiene said. “Owners of these cars may sign waivers with manufacturers, claiming responsibility for technology, in which case you may need to buy a cyber policy in case someone hacks their car.”

That leaves an increased, although nuanced, role for independent insurance agents.

“This brings out a whole new area of expertise that agents are going to have to develop, and it’s going to create new products,” he said. “The reality is there’s still going to be a huge responsibility and a huge need – maybe an even greater need – for professional insurance agents and risk managers to help car owners navigate what will be a much more complicated insurance world than it is today.”