Blockchains can work for car insurance: Using smart contracts and sensors to provide on-demand coverage

The last couple of years witnessed the explosion of two major technological revolutions, with vehicles, that started to be regarded as the next frontier for artificial intelligence and blockchain, which began to be considered by the wider public for the great changes it could bring in a number of heterogeneous domains. In order to take part in these revolutions, in this paper we show how blockchain and sensors installed on a vehicle could be combined to (semi-)automatically activate/deactivate car insurance covers in an envisaged on-demand insurance scenario. We present a prototype, which includes a mobile app and a portable electronic device to be installed onboard. The mobile app lets the driver dynamically change the status of specific insurance covers (in some cases, after pictures of the vehicle have been taken to attest its conditions). Each modification (and picture hash) is saved on the blockchain within a smart contract, in order to certify changes made (and vehicle’s status). Sensors embedded in the electronic device are used to collect passengers’ and vehicle’s data. Data are then used to automatically modify insurance covers based on car/environment conditions and preferences set. The proposed solution could help lowering policy modification costs and limiting insurance frauds.