The Insurance Implications of Self-Driving Cars

Self-driving cars may be taking longer than expected, but it looks like they could be coming to the UK in the near future. In addition to the impact on transportation norms and businesses, the rise of self-driving cars has significant implications for insurance.

Self-Driving Levels

When people talk about self-driving vehicles, also called automated vehicles, they may be referring to varying levels of automation. According to the United States Environmental Protection Agency, these levels are as follows.

• Level 0 cars have no automation. However, they may have automated safety features, such as automated emergency braking.
• Level 1 cars use automation for driver assistance. These cars may be able to control speed or steering, but not both simultaneously. Examples of level 1 systems include adaptive cruise control and lane assist technology.
• Level 2 cars can control both speed and steering simultaneously under certain conditions. However, the driver still needs to be fully alert and ready to take the wheel.
• Level 3 cars have conditional automation. These cars can control speed and steering, monitor the surroundings and drive on their own under certain conditions. However, the driver still needs to be fully alert and ready to take the wheel.
• Level 4 cars are highly automated and can handle most normal driving conditions. If the vehicle encounters conditions it cannot handle, it should pull over and stop on its own.
• Level 5 cars are considered fully automated. These cars should be capable of driving on their own in all conditions.

The Timeline for Self-Driving Vehicles

Many self-driving vehicles are being tested on US roads. According to Motor Trends, seven states allow self-driving vehicles to operate without a driver behind the wheel or without a licensed driver as long as the vehicle is classified as level 4 or level 5. Some other states also allow self-driving vehicles with varying requirements.

In the near future, high-level automated vehicles could also be seen on UK roads. According to Insurance Journal, Mark Harper, UK transport minister, says self-driving cars could be on some UK roads by as early as 2026. These cars could have full self-driving capabilities.

Self-Driving Vehicle Uses

Self-driving vehicles could have a major impact on personal transportation and business operations.

• Self-driving trucks could revolutionize trucking. The US Library of Congress says fully autonomous trucks are expected on US highways by 2027. Automated truck platoons in which only the lead truck has a driver are also expected.
• Self-driving taxis could provide another option for individuals. Waymo is already operating what it calls “the world’s first autonomous ride-hailing service” and is available to the public in Phoenix, Arizona, and San Francisco, California.
• Self-driving personal vehicles could remove the need for driving skills. Some vehicles already have some autonomous capabilities. Tesla’s system is currently at level two, according to Drive.

Self-Driving Safety Concerns

Self-driving vehicles have raised safety concerns.

In 2018, the first death involving a fully autonomous vehicle occurred in Arizona when an Uber self-driving vehicle struck a pedestrian. According to CNN, the test driver behind the wheel at the time was supposed to be monitoring the car and pleaded guilty to endangerment. More recently, Reuters says a General Motors Cruise robotaxi struck and dragged a pedestrian six meters after the pedestrian was hit by another vehicle. The pedestrian was severely injured.

Researchers at King’s College London found that autonomous vehicles have trouble detecting children and darker-skinned pedestrians.

Other things can also confuse autonomous vehicle sensors. According to Business Insider, a Tesla owner shared a video in which his vehicle mistook the moon for a yellow light and slowed down. There have also been reports of Tesla systems being confused by the sun or a billboard showing a stop sign.

Then again, human drivers are far from perfect. The difference is that when a human driver causes an accident, it’s often fairly straightforward to assign blame. When self-driving systems are involved, the situation can become more complicated.

Who Is Liable for Self-Driving Crashes?

Let’s say a company starts using fully self-driving trucks. One of the trucks is involved in a crash when the autonomous system fails to detect another vehicle. The driver of the other vehicle is seriously injured. In this case, who is liable – the trucking company or the vehicle manufacturer?

According to Insurance Journal, UK legislation announced in November would make car makers legally liable for crashes. This means the owners of self-driving vehicles would not be held liable for crashes caused by self-driving systems.

However, other jurisdictions may have different rules. There may also be cases in which the owner of the vehicle is deemed to be partially at fault, for example, for making changes to the vehicle or failing to provide necessary maintenance. These are new issues, so a lot remains uncertain.

As self-driving cars become more common, insurance will need to adapt. According to MarketWatch, the traditional model of insurance may need to change to hold manufacturers and software developers accountable. Coverage will also be needed for new risks, such as faulty cybersecurity and GPS systems.

Insurance for self-driving cars / trucks may not be an immediate concern for UK drivers and businesses, but Costero remains on the cutting edge of these emerging risks that new technology brings. If you want to discuss any potential opportunities for automated fleets of vehicles or professional indemnity or products liability for the technology driving it then Costero can help. Learn more.