Blockchains Can Work for Car Insurance: Using Smart Contracts and Sensors to Provide On-Demand Coverage


Blockchains and sensors installed on a vehicle could be combined to semiautomatically activate/deactivate car insurance coverage in an envisaged on-demand insurance scenario. We present a prototype that includes a mobile application (app) and a portable electronic device to be installed onboard. The mobile app lets the driver dynamically change the status of specific insurance coverage (in some cases, after pictures of the vehicle have been taken to attest to its conditions). Each modification and picture hash (a fixed-length alphanumeric summary of data content) are saved on the blockchain within a smart contract to certify changes made as well as the vehicle's status. Sensors embedded in the electronic device are used to collect passengers' and the vehicle?s data. Data are then used to automatically modify insurance coverage based on car/environment conditions and the preferences set. The proposed solution could help lower policy modification costs and limit insurance fraud.