As self-driving cars get closer to a reality, the insurance industry is still figuring out how to write coverage for this type of situation. An article in the New York Times last summer said the technology is currently ahead of insurance company’s ability to figure out how to write auto premiums.
Eventually the insurance companies will have to make some decisions on things like whether the maker of the self-driving car, the software maker, or the driver, is at fault. This could have a big impact on casualty insurance since it essentially is liability coverage for automobiles. Questions like this will no doubt eventually be part of the casualty insurance exam in most states. For now the insurers are handling such cases as they do now, focusing on drivers, but they realize they are facing a brave new world.
It would be a good series of questions for a casualty insurance exam as insurance companies figure out what direction to take.
There was the case of a fatality involving a Tesla electric sedan using an autopilot system recently. The question insurance agencies will eventually face, is what to do when drivers say the software that pilots the car is at fault, and not the driver. Indeed, this would be a great essay question on a casualty insurance exam.
For its part, Tesla says its software does not relieve the owner of the car of responsibility for what happens while the car is on autopilot. Tesla says it does not create an autonomous automobile. The question is, will that defense hold up in court for Tesla if someone raises the issue.
In the fatality accident a year ago, the self-driving software was in a Beta state and had been activated. The driver had a typical insurance policy and is still under investigation.
Typically what happens now, is insurance companies pay the claim of the driver at fault, regardless of whether the car is using self-driving technology. The insurance companies then have the right to seek damages from the auto maker or software developer is they choose to do so.
Most states require liability coverage, which can also be seen as casualty insurance.
The issue is a new one, and few states have adopted any kind of rules regarding who is at fault when there is an accident involving a self-driving car. Certainly it is not on a casualty insurance exam yet, but it would no doubt generate some thought and some interesting answers.
Exam or not, the insurance industry is going to need to answer some of these questions as it considers how to write coverage in the future. States will also have to determine how they want to proceed with rules governing self-driving cars. The technology is coming fast, and answers will be needed soon.