Who is liable for the crash of a driverless car?

One in five drivers say they would switch to a driverless car if available, but the insurance implications are tricky.

Insurance News


If given the choice, one in five Americans would surrender control of their vehicle to a self-driving computer, a new survey from CarInsurance.com reveals.

The 2,000 drivers interviewed for the report may soon have the option. Google’s experimental fleet of driverless cars has already generated significant buzz, and Nissan recently announced it will start selling autonomous cars by 2020.

However, Robert Peterson, director of the Center for Insurance Law and Regulation at Santa Clara University, says driverless cars would create some interesting complications in auto insurance for both insurance professionals and insureds.

In a presentation given at the State Insurance Trade Association Conference in Las Vegas, Peterson acknowledged the increased safety features in driverless cars, but questioned how insurers would determine liability in the event of an accident.

“When, if ever, will a faultless driver be ‘legally responsible’ for an accident or be ‘legally entitled’ to recover from a faultless, uninsured motorist?” Peterson questioned.

The definitions of “defect” and “negligence,” would also need to be modified, he said.

Leaning on past legal cases, Peterson surmised that the operator of the driverless car would become the “agent” of the vehicle and as such, may be liable for “financial responsibility limits.” He referenced a 1968 case in which a defect in the car’s program—its poorly repaired brakes—was determined to be the fault of the vehicle’s “agent.”

Aside from legal complications, Peterson expressed thoughts on the potential “demise of auto liability insurance premiums.”

“Property/casualty insurers [would] see a major reduction in their auto insurance premiums revenue,” he said, suggesting that eliminating “human error” may also eliminate 90% of premiums of fault-based accidents.

Similar decreases in comprehensive and collision losses could be seen as well, Peterson suggested.

Instead of spelling out the end of insurance, however, these shifts may merely alter the reasons people purchase auto coverage. In the event of an accident, insurers would pay the claim and then pursue manufacturers of driverless cars in court for faulty manufacturing, which could drive rates back up. Direct lawsuits against the car’s “agent” would also warrant proper insurance.

“If there is any chance of [law]suits, car owners will want insurance of their own,” Peterson said.

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