Matthew Channon & Lucy McCormick consider the challenges that driverless cars are posing for the insurance industry
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May 2016 saw the UK announcement of the world’s first driverless car insurance legislation, as well as the launch of the first consumer driverless car policy.
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However, the insurance of driverless cars remains a thorny issue, raising questions of how to set premiums and how to determine liability.
- Over the next few years, the focus is likely to move from individual motor policies to manufacturers’ product liability cover. In the longer term, one possible solution would be the establishment of a central “no fault” compensation fund paid into through a premium on the purchase of driverless cars.
According to the Royal Society for the Prevention of Accidents, 95% of all road accidents involve human error, and in 76% of road accidents the driver is solely to blame. Factors include tiredness, impatience and alcohol. While “driverless” cars are not infallible—as illustrated by February’s “Googlecar” collision and May’s fatal Tesla “Autopilot” crash—their introduction is likely to dramatically reduce the number of collisions. Even lesser levels of automation—such as
