posted 11 months ago

New Insurance Rules For Autonomous Vehicles Proposed

Government proposes new, autonomous car, insurance rules to ensure innocent parties receive post-crash compensation.

Vehicle Technology and Aviation Bill explained

Autonomous cars must be insured via a policy that is valid when working in autonomous, self drive, mode and if motorists take control, The Vehicle Technology and Aviation Bill proposed. Among other things, this ensures that if there is a crash – whether a car or driver is responsible – innocent parties are compensated easily. 

Let us consider how. If a vehicle causes a collision while operating autonomously any innocent parties can, therefore, be compensated via its insurer – rather than by suing the manufacturer. Fewer private court cases, in other words. However, the insurer might try to recoup its losses through the manufacturer.

The Secretary of State is responsible for confirming which cars are sufficiently automated to be insured through a new, combined, policy, the Vehicle Technology and Aviation Bill proposed. The incumbent must prepare/maintain a list of all motor vehicles which:

  • “are, or might be, used on roads or in other public places in Great Britain, 
  • are in the Secretary of State’s opinion designed or adapted to be capable, in at least some circumstances or situations, of safely driving”. 

The Bill further proposed that it be possible to invalidate a policy. The Insurer's liability could be dismissed or limited if:

  • “alterations to the vehicle’s operating system made by the insured person, or with the insured person’s knowledge, that are prohibited under the policy,
  • a failure to install software updates to the vehicle’s operating system that the insured person is required under the policy to install, or to have installed.”

Government's perspective

Transport Secretary, Chris Grayling, explained: “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. Today we are introducing the framework to allow insurance for these new technologies”, he concluded.

Insurance company's perspective

David Williams, Head of Underwriting at AXA UK, added: “This is a positive step forward that provides clarity to insurers to ensure we design our products appropriately. It keeps protection of the general public at its heart which we hope will encourage early adoption of some really impressive technology.”

He continued: “The vast majority of accidents are caused by human error. We see automated vehicles having a massive impact (by) reducing the number and severity of accidents. As well as making our roads safer, insurance premiums are based on the cost of claims and therefore we expect substantially reduced premiums to follow.”