New Roads: How Autonomous Vehicles Will Change Law and Insurance

As we speed into an era of automation in personal transportation, it is critical to gain a better understanding of driverless technology, its evolution, and its impact on daily life. In this session at RIMS 2023, David Klein, Partner at Pillsbury, Winthrop, Shaw, Pittman, LLP, highlighted the latest adaptation to autonomous vehicle liability laws and insurance markets.

New automobiles are being built with enough autonomy to ignore the driver’s wishes with items like adaptive cruise control, lane departure warnings, and more. Driverless cars are already on the road in many markets, including personal vehicles, taxis and other various commercial vehicles like automated semis.

The statistics show that this is a good thing. NHTSA reports that 94% of serious crashes were due to human error. The estimated cost of these crashes is $800 billion. In addition to mitigating that issue, these cars are anticipated to alleviate rush hours, reduce fuel consumptions, and offer more independence to disabled drivers. But, these benefits do not come with additional complications.

What is an Accident?

In response to this trend, various states have already begun creating regulations that will be amended from year to year to address the increased amount of accidents that will be attributed to the vehicle rather than to the driver. We are coming to a crossroads as to where the responsibility will lie. Currently, that responsibility typically goes to the driver. However, built-in programming choices or equipment/software failure that cause crashes will likely be transferred to manufacturers. This will create liability risk for the manufacturer.

How Will This Impact the Insurance Market?

How will liability be proportioned when a driverless car collides with a manually driven vehicle? Will the level of automation used come into consideration? Is anyone considering the risk of the vehicle being hacked?

All of these issues create implications for insurance carriers. Insurance may begin encouraging the switch due to the risk mitigation benefits. Reduced losses could come from the automation, and carriers could bring that into their premium strategy. However, auto liability will no longer suffice. There will likely become a need for cyber liability and product liability to help protect against these risks.