Advertisement

Will Autonomous Cars Put an End to the Traditional Third Party Liability Insurance Coverage?

  • Viviane MardirossianEmail author
Chapter
Part of the AIDA Europe Research Series on Insurance Law and Regulation book series (ERSILR, volume 1)

Abstract

It happened. Self-driving cars left the field of imagination and became a reality. They can be seen not only in the news but also in some countries already in the streets. After millions of kilometers of driving tests, together with large investment in this new technology coming from several companies such as Tesla, Volvo, Ford and GM, no doubt that this upcoming reality will reduce the number of accidents in the very near future, making autonomous cars much safer than those driven by humans. A report from consulting firm McKinsey & Company, estimates a reduction of 90% of the accidents that would save about USD 190 billion in cost of roadway crashes just in the US.

However, until we have a world with only driverless cars on the streets, we will be experiencing a mixed environment, where misfortunes can still happen, as shown in the accident with a Tesla vehicle equipped with the Autopilot technology that ended up by killing Joshua Brown, a 40-year old from Ohio, back in May 2016. Therefore, if accidents can still happen, who should be liable when an autonomous car is involved and which insurance policy will respond to cover the extent of the damages? In other words: When there is no human behind the wheel and the machine simply chooses the path of those involved in a car accident, will the owner of the vehicle still be held liable or will liability be transferred to the equipment manufacturers when the system fails?

Autonomous cars technology will definitely change the focus of an insurance coverage that involves billions and billions of dollars in premium and indemnities every year: Motor third party liability. Currently, most car accidents are caused by human mistakes; therefore, the person that has caused the damage is obliged by law, in most jurisdictions, to pay for the consequences. However, when it comes to self-driving cars, after an accident, there will be enough discussion on liability field to define who should be held responsible and consequently car insurers might shift their traditional business model. The transition from human driver controlled vehicle to autonomous machines that circulate in public streets still lacks supporting legislation and clear liability definition rules. This paper aims to explore the legal implications of driverless cars and impacts on liability, from an insurance perspective, and discuss possible future scenarios for the motor third party liability insurance coverage.

References

  1. Automotive News Europe, August 15th, 2018, Spain works toward framework for autonomous driving. http://europe.autonews.com/article/20180815/ANE/180809786/spain-works-toward-framework-for-autonomous-driving
  2. Autovista Group, April 3rd, 2018, France to amend legislation for autonomous vehicle trials. https://www.autovistagroup.com/news-and-insights/france-amend-legislation-autonomous-vehicle-trials
  3. Bertoncello M, Wee D (2015) Ten ways autonomous driving could redefine the automotive world. https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/ten-ways-autonomous-driving-could-redefine-the-automotive-world
  4. Bose U (2015) The black box solution to autonomous liability. Wash Univ Law Rev 92:1325Google Scholar
  5. Davi Connekt. www.davi.connekt.nl
  6. Deloitte (2016) Quantifying an uncertain future: insurance in the new mobility ecosystem. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-cons-insurance-in-the-new-mobility-ecosystem.pdf
  7. Funkhouser K (2013) Paving the road ahead: autonomous vehicles, products liability, and the need for a new approach. Utah Law Rev:437Google Scholar
  8. Global Legal Monitor. Netherlands: legislation to allow more testing of driverless vehicles. http://www.loc.gov/law/foreign-news/article/netherlands-legislation-to-allow-more-testing-of-driverless-vehicles/
  9. Gurney JK (2013) Sue my car not me: products liability and accidents involving autonomous vehicles. Univ Ill J Law Technol Policy:247Google Scholar
  10. Hall Z (2018) Apple ramping self-driving car testing, more CA permits than Tesla and Uber. Electrek. Retrieved 21 March 2018Google Scholar
  11. Hugh Durrant-Whyte, Fellow, IEEE, and Tim Bailey, “Simultaneous Localisation and Mapping (SLAM): Part I The Essential Algorithms”Google Scholar
  12. Informal document No. 2, Economic Commission for Europe, Inland Transport Committee, Global Forum for Road Traffic Safety. https://www.unece.org/fileadmin/DAM/trans/doc/2017/wp1/ECE-TRANS-WP1-2017-Informal-2e.pdf
  13. Kohler WJ, Colbert-Taylor A (2014) Current law and potential legal issues pertaining to automated, autonomous and connected vehicles. Santa Clara Comput High Technol Law J 31:99Google Scholar
  14. KPMG (2018) Autonomous Vehicles Readiness Index. Accessing countries openness and preparedness for autonomous vehicles. https://assets.kpmg.com/content/dam/kpmg/nl/pdf/2018/sector/automotive/autonomous-vehicles-readiness-index.pdf
  15. Luperto I, Porrini D (2005) Dynamic risk classification in a law and economics perspective: the Italian perspective. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=828824
  16. Marchant GE, Lindor RA (2012) The coming collision between autonomous vehicles and the liability system. Santa Clara Law Rev 52:1321Google Scholar
  17. Munich Re (2016) Autonomous vehicles. considerations for personal and commercial lines insurers. https://www.munichre.com/site/mram-mobile/get/documents_E706434935/mram/assetpool.mr_america/PDFs/3_Publications/Autonomous_Vehicles.pdf
  18. National Conference of State Legislatures, Autonomous vehicles self-driving vehicles enacted legislation. http://www.ncsl.org/research/transportation/autonomous-vehicles-self-driving-vehicles-enacted-legislation.aspx#enacted
  19. New Atlas, June 8th, 2016, UK company launches insurance policy for autonomous cars. https://newatlas.com/adrian-flux-driverless-car-insurance/43739/
  20. Schreurs MA, Steuwer SD (2016) Autonomous driving – political, legal, social, and sustainability dimensions. In: Maurer M, Gerdes JC, Lenz B, Winner H (eds) Autonomous driving, technical, legal and social aspects. Springer OpenGoogle Scholar
  21. Smith BW (2014) Automated vehicles are probably legal in the United States. Tex A&M Law Rev 1:411Google Scholar
  22. Surden H, Williams M-A (2016) Technological opacity, predictability, and self-driving cars. Cardozo Law Rev 38:121Google Scholar
  23. Technology News, August 23rd, 2017, Germany draws up rules of the road for driverless cars. https://www.reuters.com/article/us-autos-autonomous-germany/germany-draws-up-rules-of-the-road-for-driverless-cars-idUSKCN1B31MT
  24. The Drive, May 12th, 2017, German green-lights self-driving cars with new law. http://www.thedrive.com/tech/10215/germany-green-lights-self-driving-cars-with-new-law
  25. The New York Times, March 19th, 2018, Self-driving Uber car kills pedestrian in Arizona, where robots roam. https://www.nytimes.com/2018/03/19/technology/uber-driverless-fatality.html
  26. Website of National Highway Traffic Safety Administration in. https://www.nhtsa.gov/technology-innovation/automated-vehicles-safety
  27. Wood SP, Chang J, Healy T, Wood J (2012) The potential regulatory challenges of increasingly autonomous motor vehicles. Santa Clara Law Rev 52:1423Google Scholar

Legislative Instruments

  1. 1968 Vienna Convention on Road Traffic dated November 8, 1968Google Scholar
  2. Law no. 58-208 dated February 27, 1958, FranceGoogle Scholar
  3. Law no. 85-677 dated July 5, 1985, France (“Badinter Law”)Google Scholar
  4. Road Traffic Act 1988, Parliament of the United KingdomGoogle Scholar
  5. Road Traffic Act, 1930, Parliament of the United KingdomGoogle Scholar
  6. Royal Legislative Decree 8/2004 dated October 29, 2004, which approves the revised text of the Act on civil liability and insurance in the circulation of motor vehiclesGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.General Reinsurance AG, Rep. OfficeSao PauloBrazil

Personalised recommendations