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

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


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.


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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

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

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