This article is part of our special report How will big data change insurance?.
The European Commission is trying to figure out whether insurance laws should be changed to cover crashes caused by driverless cars. With no human in control of the cars, insurance companies are already rethinking who will be liable for the new technology.
A Commission-led group is meeting with industry associations on Monday (13 June) to discuss who will be responsible for damages when fully autonomous cars are available for sale in Europe. EU sources say the executive will likely announce whether it will propose new legislation in 2018.
The meeting is part of the executive’s Gear 2030 working group with car manufacturers, telecoms companies and the insurance industry to make driverless cars available by its own 2030 deadline.
Cars that run without any help from a driver could upend how insurance works because a vehicle owner will no longer have control.
Fully driverless cars are already being tested on highways in several EU countries. Cars with some partially autonomous functions like automatic braking are already for sale.
A Juncker Commission document outlining Gear 2030’s priorities on driverless cars says insurance models would likely not need to be changed for the next ten years since cars will be outfitted with a growing amount of automated features but still be operated by drivers.
“Can there be at all a somehow fault-based liability approach if actions are determined by software and algorithms?,” the document reads.
Current EU law requires all vehicles to be covered by car insurance. If pedestrians and bicyclists are injured by a car, they’re covered by the car’s insurance under the 2009 motor insurance directive.
Officials pushing the executive’s work on driverless cars say one draw of automation technology is that it will likely cause a drop in road collisions.
Who is accountable?
But when there are accidents with driverless cars, it could become more difficult to identify what caused them.
“Who is accountable for the risk? The machine? The satellite link? This is the kind of stuff that needs to be figured out and what the regulators are still working on,” said Robert Dickie, Chief Technology Officer at Zurich insurance.
Some lawyers say one model to cover fully driverless cars is so-called zero fault insurance that would mean insurance policies covering other vehicles involved in collisions would pay for damages.
“It would be extremely difficult to identify a fault with autonomous vehicles. The longer it would take to identify a responsible party the more costly it would be for insurers,” said Daniel Fesler, a partner in law firm Baker & Mckenzie’s Brussels office.
According to Fesler, the insurance industry will lose out if liability is shifted from drivers to manufacturers of driverless cars.
“Their interest is that liability stays at the level of the owner or user of the car so they can sell insurance policies to them,” Fesler said.
“If the market is reduced to a few manufacturers they could sell important and large policies to these groups but the market would be reduced,” he added.
Nicolas Jeanmart, head of personal insurance, general insurance & macroeconomics at trade association Insurance Europe, said, “Irrespective of the future level of automation of cars, insurance will continue to play an integral role in providing essential protection to drivers of automated vehicles.”
In the European Parliament, deputies are putting together their own views on automation and how new laws could protect users of robots and driverless cars.
A draft report published last week (31 May) in the Parliament’s Legal Affairs Committee (JURI) suggested that “the greater a robot’s learning capability or autonomy is, the lower other parties’ responsibility should be.”
Luxembourgish MEP Mady Delvaux (S&D), rapporteur on the draft text, said she hasn’t decided yet whether driverless car owners or manufacturers should be liable for accidents, but her priority is to make sure victims are compensated.
“One solution could be to trace responsibility back to the producer. If the producer is always responsible, we can put insurance costs into the cost of a product. Otherwise we would have a complicated system where the victim has to sue all the entities involved,” Delvaux told euractiv.com.
Delvaux’s report, an own-initiative text with no legal implications, will be voted on in the JURI committee in November.
Carmakers push back
Car companies are pushing back against calls to shift all liability to manufacturers because they argue that driverless cars will use software from multiple sources.
Eric Jonnaert, secretary general of ACEA, the association representing European car companies, said manufacturers shouldn’t be liable for collisions under all circumstances.
“How can you verify what the cause is? Was it an application a driver downloaded or was it some of the technology that was already in the car when the car was purchased?,” Jonnaert said.
“That question needs to be clarified because if that’s not clear then the potential of expanding autonomous vehicles will be limited. Who wants to take that risk?,” he added.