Automated vehicles: but what about insurance?

Vehicles known as “automated vehicles” are ones where a driver can hand over control to the vehicle.

The vehicle is then driven by the on-board technology. This may be for part of, or for the whole of, the journey. As the technology is developed we will see greater use of automated vehicles, not least where the driving is fully automated. Entire journeys may increasingly be conducted by the automated vehicle itself.

Accidents involving non-automated vehicles are normally caused by human error. But what happens if an automated vehicle has a fault and there is an accident after driving has been handed over to the vehicle by its driver? Who will pay compensation for injury and damage? The manufacturer? The driver who handed over control to the vehicle?

It has been necessary to find a simple way of addressing this basic issue. The anticipated Automated and Electric Vehicles Bill 2017 introduced to Parliament on 18 October 2017 addresses this. The intended solution is to extend the compulsory motor vehicle insurance that already exists to cover the use of automated vehicles when they are driving themselves.

This will mean that where the automated vehicle has a fault and an accident is caused by it, the situation will be covered by the insurance policy, the insurer paying out compensation to any affected party – this may be not only to passengers, pedestrians or other road users but indeed the “driver” who had transferred over control of the vehicle from himself or herself to the automated vehicle. It will thereafter be possible for the insurer to recoup the costs it has had to pay out back from the manufacturer.

The above summarises the general intended way forward and avoids what would be otherwise highly complicated alternatives. The Automated and Electric Vehicles Bill also addresses some related issues. It provides that insurers will not have liability to the insured in some situations, such as where an insured person alters the vehicle software contrary to the insurance policy or where there is a failure to ensure safety-critical software has been updated on the automated vehicle.

One obvious change in the insurance position is that currently a driver must have an insurance policy to protect third parties, as a minimum requirement. The additional compulsory insurance required for an automated vehicle will cover not only third parties but the driver of the automated vehicle itself.

Much has been written about the understandable fears drivers may have in using automated vehicles in fully automated mode, but it is worth remembering that the overwhelming majority of accidents in non-automated vehicles are caused through human error. Many of us already deploy some elements of automated driving in parts of our daily vehicle usage, such as cruise control or brake assist. Development of the technology is moving very quickly but we are not quite yet at the stage where fully automated vehicles can be deployed on the public highway. And many other changes to existing road traffic legislation will be needed for that to take place.