Insurance laws to be changed in response to self-driving cars
The UK government is intending to alter the law to acknowledge the arrival of autonomous vehicles on the roads. Its proposed changes would ensure all parties, including drivers, were covered in the event of an accident involving a self-driving car. Autonomous vehicles are anticipated to be on the UK's roads by 2021, at which point the new compulsory insurance requirements will be introduced. The current law is inadequate since it only covers drivers' use of vehicles and doesn't account for cars being operated autonomously. The measures are contained in the Automated and Electric Vehicles Bill.

The Government is confident that it will press ahead to change the law surrounding motor insurance in order to ensure that all parties are covered in the event of an accident involving self-driving cars.

Chris Grayling, the Transport Secretary has said that he expects the first autonomous vehicles to arrive on the UK’s roads by 2021, which will require the creation of a new compulsory insurance framework that covers motorists when they are driving, and when the driver has legitimately handed control to the vehicle.

“This will ensure that victims have quick and easy access to compensation and that insurers can recover costs from the liable party, which in the majority of cases is anticipated to be the manufacturer,” said Grayling, speaking to a group of insurers at an event in the City of London.

“It will allow consumers to buy insurance in the same way they do today.”

As things stand he said, policyholders may not be covered for collisions caused by autonomous vehicles, because only the driver’s use of the vehicle is insured.

“Victims might have to take vehicle manufacturers to court, which would be time consuming and expensive, undermining the quick and easy access to compensation that is a cornerstone of our insurance system,” he said.

“If we fail to address this beforehand, we risk jeopardising consumer protection, and undermining the competitiveness of our automotive industry.”

Grayling added that premiums will be expected to go down in price as self-driving cars will make the UK’s roads a lot safer, so reducing the number of claims.

He added that the new insurance measures, contained in the Automated and Electric Vehicles Bill, would help provide certainty to the insurance industry – and clarity to the public – about the changes ahead.

Paul Ridge, a banking and insurance specialist, at SAS UK & Ireland said that the Government’s decision to change motor insurance meant it was “pedal to the metal” time for insurers.

Ridge suggested that the insurance sector could use the new driving technology to its advantage by using the data that autonomous cars could provide.

“More insurers need to appreciate the value of data and real-time insight these connected cars can provide,” he said.

“There is a torrent of potential data sources being streamed from technologies [that]help customers’ vehicles stay in lane and brake in an emergency, for example, and also collect information from installed cameras to continuously update maps that self-driving cars will use. Insurers must be willing to adapt to these changes through product innovation. Traditional risk pools could reduce, but new areas of demand emerge. If an autonomous car is involved in an accident with another vehicle while the car and not the driver is in control, then who is at fault? What new risk do autonomous vehicles present? These are the key questions that insurers need to explore.”