The Association of British Insurers (ABI) and crash test firm Thatcham Research have released a joint response to the Government's recent consultation for driverless cars (see our update here). The 'major' nine-week consultation launched in July, to allow Britain to pave the way for the development of driverless technology, concluded on 9 September 2016.
ABI and Thatcham Research are key supporters in the move to driverless cars as they believe it has "potential to deliver major benefits" and their response provides a detailed view to three main areas that need to be 'ironed out' to ensure successful development in the industry.
1. Single Motor Insurance Policy
Ben Howarth of the ABI said they would "prefer a single insurance policy so that anyone making a claim would have a single place to go. The less complexity there is for the road user, the better.”
They propose an injured party would make a claim against the driver's motor insurance and once a claim is settled, the insurer would then pursue other companies involved, such as the car manufacturer or software supplier. As it currently stands the driver, rather than the vehicle, is insured therefore a change in legislation would be required as "it is vital that there is clarity over what the responsibilities of manufacturers and car owners/users will be in this area". Safeguards need to be implemented to protect insurers who have taken responsibility for settling claims as it would be unfair to make motor insurers responsible for claims related to systemic failures. Indeed manufacturers such as Volvo have already pledged to pay claims when the accident is due to vehicle fault.
2. No Product Liability Policy
The Government has suggested extending the existing product liability insurance model to cover manufacturers of driverless cars, requiring drivers to purchase a separate product liability policy. However, the ABI and Thatcham Research have said a separate product liability "would be too complicated, risk leaving road accident victims without enough cover" and create a number of challenges:
- Product liability insurance is currently optional, in contrast to motor insurance which is compulsory in the UK.
- Cover for personal injuries under motor insurance is unlimited, whereas product liability cover may have limits, for example, £5 million or £10 million. This may lead to the level of recovery being determined by the type of insurance rather than by the severity of losses the injured person sustained.
- There is a limitation on product liability claims of 10 years. Limiting claims according to the age of the vehicle would not serve the intended outcome of the Road Traffic Act, especially as motorists are under an obligation regarding the ongoing roadworthiness of their vehicles, whatever their age.
3. Effective Data Sharing
A key concern for the ABI and Thatcham Research was data sharing as they believe effective data sharing underpins the system. "If insurers are not confident that they will have access to appropriate data to settle a claim fairly, it will undermine the development of a competitive market for insuring automated driving."