Driverless car laws and insurance
The Law Commission of England and Wales is currently undertaking a far-reaching review of the legal framework for driverless cars… and insurers are keen to contribute.
The deadline for submissions to the preliminary consultation paper passed last week and AXA Insurance has highlighted what it hopes will be key themes:
1) Access to data and a transparent framework for effective data governance is fundamental for establishing liability and accurate risk modelling.
2) The legal and regulatory framework must clearly define the responsibilities of the users of autonomous vehicles (AVs) and any changes to the current road safety regime.
3) Consumers must be educated on their responsibilities, how the equipment should be used and the regulations attached to them.
Noting the Government’s recent announcement on the advanced trials for self-driving vehicles, David Williams, managing director of underwriting and technical services at AXA, said: “We are only in February but the world of driverless has started 2019 at a blistering pace.
“It might not sound as exciting as trials and tech, but as driverless cars are rapidly becoming a reality, it is right now that we need think about the legal aspects of this technology. The consultation had 46 detailed questions on areas ranging from the responsibilities of a human user to the need for data retention.”
In its submission, the International Underwriting Association (IUA), which represents many of the world’s largest insurance companies, argued that accident data should be automatically retained.
Chris Jones, IUA director of legal and market services, said: “The technology surrounding driverless cars is developing rapidly. It is essential, therefore, that an effective framework is established governing their operation. Insurers have a vital role to play in this process.
“In order for liability to be established, vehicle data must be recorded and made available. This will include, for example, the status of the automated system, whether engaged or disengaged, the speed of the vehicle and any camera footage from the time of the accident.
“As information expands and usage grows, we are likely to see potential vulnerabilities highlighted and new risk areas emerge. We anticipate that the technology will be capable of self-reporting system errors, defects and other issues affecting road worthiness.”
In a sign of things to come, Bloomberg reports that entrepreneur Dan Peate has launched Avinew, with $5m in seed funding, offering an insurance product which monitors drivers’ use of autonomous features in cars made by Tesla, Nissan, Ford and Cadillac.
Discounts will be determined based on how the features are used, after the customer has given permission for their driving data to be accessed.
This seems a logical next step in telematics or ‘black box’ insurance, which tracks the way you drive and links it to the amount you pay.
In terms of what happens in the event of an accident, a story in the Daily Express explained how a fraudulent claim worth £6,000 was prevented using telematics.
A Renault Clio driver facing a whiplash claim was cleared by data showing that the incident occurred at under 5mph. Martyne Miller, associate director of Coverbox said: “The data was able to successfully refute a substantial claim, saving both the motorist and the insurer money.”
Once cars are fully autonomous, Rodney Parker, associate professor of operations management at Indiana University, predicts that “liability is likely to migrate from the individual to the manufacturer and the licensers of the software that drives the AV.”
There’s also the possibility that motorists could be encouraged out of driving via the prohibitive cost of insurance.
The Law Commission was asked to look at the legal framework for driverless cars by the UK’s Centre for Connected and Autonomous Vehicles (CCAV), a joint Department for Business, Energy & Industrial Strategy (BEIS) and Department for Transport (DfT) policy team.
If these insurer submissions are anything to go by, the focus will be at least as much on the connected elements as the autonomous ones.
Will it have anything to say about who to save in no-win crash situations or who should be the data controller?
The final report is due in March 2021.
