Insurance and the driverless cars – October 2017

Insurance and the driverless cars - October 2017Kate Sweeney

With the introduction of driverless cars onto our roads well underway, and the transition from current fleet of vehicles on our roads to an entirely autonomous fleet expected to reach the market within the next two to five years, the Government, following a period of consultation, has earlier this year announced proposals relating to a rolling programme of regulatory reform. The focus of such reform is on changes needed to enable the wide use of advanced driver assistance systems (ADAS) and automated vehicle technology (AVT). Our current insurance model is based on the driver rather than the vehicle, so it’s clear that change is needed. And quickly if the UK is to continue to be at the forefront of automated vehicle technology.

The Government’s key policy objective is to ensure that drivers of an automated vehicles (AVs) are insured so that victims of accidents involving AVs receive compensation quickly and in compliance with the EU Motor Insurance Directive.

And they intend to do this by extending compulsory motor insurance to driverless cars by way of a single insurer model – a “two-in-one” insurance policy, which will cover both the motorist when they are driving and the car when it is in driverless mode.

Such a policy is unlikely to be cheap, but making a claim currently is not without complication, and to add in the complex and unchartered territory of accidents involving artificial intelligence – the liability issues and potential for complication increased exponentially.

The Government hopes that with the introduction of a single insurer model, an innocently injured victim will have quick and straightforward access to compensation, regardless of whether they were injured while the AVT was active, or inactive.

It is anticipated that there will be specific situations when the insurer will not be liable, such as if the crash resulted from unauthorised modifications or updates made by the motorist to the vehicle’s operating system or from failure by the motorist to install required software updates, likely to be limited to those involving safety features, rather than a failure to install every update that comes along (ask yourself how soon do you update your IPhones with the IOS updates that seem to pop through weekly?).

However, an insurer will be unable to avoid paying compensation to a victim if the accident is a result of the AVT being hacked. Where the manufacturer of the vehicle is found liable, the insurer will still be required to pay out, but will be able to recover against the manufacturer under our existing common law and product liability laws.

Chris Grayling, the Transport Secretary, said: “Automated vehicles have the potential to transform our roads in the future and make them even safer and easier to use, as well as promising new mobility for those who cannot drive.

But we must ensure the public is protected in the event of an incident and this week we are introducing the framework to allow insurance for these new technologies”

It’s currently unclear how much such a policy would cost, and early indications from the insurance industry is that such policies will be initially expensive, but driverless cars are safer than those piloted by humans, so it appears inevitable that over time, theoretically as the market settles such policies should reduce in cost, coupled with the fact that there should be a reduction in the number of car accidents.

So those unfortunate enough to be involved in a collision with an AI vehicle, should find themselves better protected. And perhaps subject to lower insurance premiums?

And who knows, maybe the introduction of AI vehicles will make road traffic collisions a thing of the past?

Kate is a Partner and Head of Personal Injury for Stephensons Solicitors LLP. She is also MASS Regional Co-ordinator – Manchester.

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