for accident victims to recover whether a
human or the car was in control at the
time of the accident. In the event of a
crash in self-driving mode, claims against
the vehicle will be paid by an insurance
company who will then recover costs
from the responsible party, in some cases
The bill outlines what the Secretary of
State considers to be automated vehicles
affected by this legislation, the insurers’
liability when the accident is caused by
an automated vehicle, and includes a sec-
tion on contributory negligence. The bill
also makes two important exemptions.
First, the vehicle owner becomes liable
if unauthorized changes are made to the
car’s software. This prevents insurance
companies from insuring unknown per-
ils, which would have affected the premi-
um payment if the company was aware
of the peril when the policy was written.
The second exemption provides that the
vehicle’s owner becomes liable for failing
to install an update the policy requires to
While the suggestions made in the bill
have been welcomed by insurers, the bill
fails to address some concerns that arise
with the discussion of self-driving cars, such
as hacking, satellite failures, software issues,
navigational issues and problems with the
manual override; most of which are issues
that were addressed in the Flux policy.
With the rise of autonomous vehicles
in the U.S., accident rates will drop. At
first glance, a drop in accidents seems
good for insurers, but it is likely that
drivers of autonomous vehicles will be
less willing to pay the same premiums
as drivers of manually controlled cars,
particularly as drivers of autonomous
cars will be spending more on their
cars. Manufacturers will become liable
for a higher percentage of the accidents
that occur, and dealers will probably be-
come responsible for making sure a pur-
chaser of an autonomous vehicle is fully
informed at the time of purchase.
Although things seem to be moving
slightly faster in Europe, similar changes are coming to the U.S.; perhaps faster
than expected. Insurers in the United
States should take a look at both the Adrian Flux policy and the Vehicle Technology and Aviation bill in order to determine the most important risks to include
in a policy, and which events should be
covered by endorsement or left off of the
policy completely. Above all, personal
and commercial auto insurers should
be prepared to deal with industry-wide
changes, and attempt to be flexible and
prepared to adjust to the new auto insurance climate.
Hannah E. Smith, JD, (hsmith@alm.
com) is a staff writer with FC&S, the
premier resource for insurance coverage
analysis. Additional information about
FC&S Online is available at www.
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