Autonomous vehicles to make manufacturers liable not owners

Published: September 9, 2015

Updated: July 24, 2018

Author: Luke Jones

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Auto insurance experts say that autonomous cars could be subject to different insurance rules whereby the vehicle manufacturer is liable in the event of an accident and not the consumer.

Autonomous vehicles are currently in the advanced stages of development and will reduce car accidents as their sensors and computers have faster reflexes and drive according to the laws.

However, there is some negativity surrounding driver-less cars as hackers are already able to control normal vehicles remotely, while last week the province of Ontario through the Ministry of Transportation said it would be looking to implement regulations for autonomous cars, which could be available to consumers by 2017.

As the driver will not be in control of the car some experts in the auto insurance industry say the burden of liability will fall upon manufacturers.

"Although accident rates will theoretically fall, new risks will come with autonomous vehicles," said Domenico Savarese, group head of Proposition Development and Telematics at Zurich Insurance.

"What should be done in the case of a faulty software algorithm? Should manufacturers be required to monitor vehicles post-sale in the case of a malfunction or a hacker attack?" Savarese asked.

That would change the way car insurance is thought of and would introduce a new model into the industry, with owner liability potentially shifting to the manufacturer.

"Could a manufacturer become liable if a distracted driver causes an accident while relying on autopilot? It's too early to tell… You could pay for how much you drive, or get a lower premium based on how well you drive.”

Driver monitoring could also come into play with technology connected cars, with insurance companies able to see what you do in your vehicle and how much you use it. This is likely to be something the insurance providers will offer to drivers in exchange for better premiums, allowing them to pay less for their policy if they agree to have driver monitoring technology.

While autonomous vehicles are close to market, with some manufacturers saying their models will be available by 2020, there early cars will probably only offer limited autonomous technology. Instead, fully autonomous vehicles will not be released until 2025 as car manufacturers attempt to appease regulatory bodies and find ways to ensure road safety.