Autonomous Vehicles

The widespread adoption of autonomous vehicles will necessarily bring with it major impacts on the motor vehicle insurance industry. These impacts, which are addressed in the chapter, include decreased private ownership of vehicles, reduction in the number and severity of accidents and insurance claims, liability allocation shifts from the driver to the manufacturer of the vehicle and associated technology providers, third-party liability risks, cyber liability, infrastructure insurance and assessment of risks and premiums. Regulators and policymakers are still grappling with what the regulatory environment and framework for autonomous vehicles should comprise, and in assessing the timing and nature of regulatory intervention, the various stages of vehicle automation are critical to avoid fragmented liability issues which come with partial or conditional autonomy. A fundamental question that arises in relation to autonomous vehicles is who should be liable for injury or damage caused to the owner, driver or any other person in any accident. This chapter considers various solutions that have been adopted, or which have been proposed. With increased autonomy, it is inevitable that the focus will shift from driver liability to possible manufacturer or design defects in the vehicle. This will potentially implicate other policy types, including product liability insurance for manufacturers of autonomous vehicles and their components, and necessitate apportionment of liability with new insurance products which address product liability issues, as well as dealing with new and emerging risks such as cyber security and data protection. For insurers, the shift towards autonomous vehicles present challenges to adapt their policies and premiums to reflect the changing landscape and to compete for business. On the positive side of the ledger from an insurer perspective, three areas with significant potential for insurers in the period from 2020 to 2050 have been identified in relation to cyber security, infrastructure insurance and product liability.