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The advent of the self-driving car presents important insurance questions

Tue Jun 21st, 2016 on     Insurance Law,    

Anyone who finds themselves in the market for a new car after the passage of a decade or more is likely going to find a considerable difference between their trusted older model and the models on the lot.

That’s because in addition to the expected improvements in existing technology and other new gadgets designed to improve the passenger experience, there’s also a considerable amount of new safety technology. Indeed, gone are the days of simply having airbags and anti-lock brakes, as many new cars, trucks, vans and SUVs are equipped with everything from blind spot monitors to emergency braking systems.

As truly impressive as these advancements in auto safety technology have proven to be, they actually pale in comparison to some of the efforts currently underway by many of the major auto companies and other tech giants to develop a truly self-driving car.

In fact, these efforts are advancing at such an impressive rate that some are even predicting we’ll see a substantial percentage of self-driving cars out on the roads and highways in a mere 25 years.

While impressive, this looming transportation renaissance has already raised a myriad of important questions that need answers, particularly in relation to how the insurance industry would respond to — and even thrive — in an era where auto accidents would fall by an estimated 80 percent.     

Specifically, the following questions require careful consideration:

  • How would liability be apportioned in a crash between a vehicle driven by a human being and a self-driving car? Is the computer considered infallible?
  • How would liability be apportioned in a crash between two self-driving cars? Would the costs be split 50-50? Would the manufacturers be liable?
  • How much insurance would prove necessary for a self-driving car? Would it be sufficient to just secure insurance to cover property damage?

While the insurance industry is well aware of this issue, many officials believe that the technology is much further away than 25 years and that, even then, the love of driving is simply too engrained in American culture for people to give it up. In other words, they are confident in their long-term business prospects.

It will indeed be fascinating to see how things play out in the years — and decades — ahead. In the meantime, however, insurance companies are bound by the terms of their policies, and must be held accountable when otherwise valid claims are denied or delayed.

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