The Government has introduced its new Vehicle Technology and Aviation Bill 2016-17 in the House of Commons. The Bill sets out new rules for the insurance of self-driving cars and had its first reading on 22 February 2017, following a consultation period which ended in September 2016.
The 75-page draft Bill sets out important changes to current motor insurance rules, which the Government describes as “driver-centric” and under which all vehicles must be insured under the Road Traffic Act 1988. The overarching aim of the new proposals in the Bill is to ensure better protection of drivers by proposing that a single insurance product for automated vehicles will cover both the motorist when they are driving, as well as the car when it is in automated mode. The Bill’s intention is that if there is an accident, the compensation route for the victim should remain within the motor insurance settlement framework, rather than through a product liability framework against a manufacturer. The result should be that victims of collisions with automated vehicles have quick and easy recourse to compensation.
Insurers will in due course need to adapt their current insurance products to meet the requirements of the Bill. The insurance industry has generally endorsed the proposals. David Williams, Head of Underwriting at AXA UK described it as “a positive step forward that provides clarity to insurers to ensure we design our products appropriately”. Similarly, the Association of British Insurers has stated that “the insurance industry is 100 per cent committed to supporting the development of automated vehicles, which have the potential to dramatically improve road safety and revolutionise our transport systems.” The industry also expects the eventual impact of automated vehicles to be reflected in fewer accidents, fewer claims and consequently lower premiums.
The Government hopes that the measures will ultimately boost the UK economy by incentivising manufacturers to develop transport technology in the United Kingdom with the confidence that they are operating within a clear insurance and regulatory framework, giving them confidence to exploit early market opportunities. In this regard, the Government has stated that it is deliberately trying to answer the insurance questions “sooner rather than later”. However, the question is becoming more and more relevant to the present, not only the future. For instance, new cars are increasingly offering automated technology in their “drivetrain”, the system in a vehicle connecting the transmission to the drive axles, such as automated parking, lane departure warnings, intelligent lighting and assisted emergency braking.
Insurance proposals are just one area covered in the Bill. It extends into several other areas, such as improvements to the provision of electric vehicle charge points, changes to air traffic services and vehicle testing.