UK regulation to split motor insurance liability

As the UK prepares for the introduction of automated vehicles, legislators are developing a new legal framework to clarify arising liability issues.

The Automated and Electric Vehicles Bill is making smooth progress through parliament and one of the key objectives of the bill is regarding the insurance industry, UK secretary of state for transport, Chris Grayling said during a Nov. 6 speech at the Association of British Insurers.

Automated vehicles are going to make collisions rarer because of the nature of the technology that makes them safer, Grayling noted.

But when cases do come to market, our current compulsory insurance framework might not fully protect the people and businesses involved. As things stand, they might not be covered for collisions caused by autonomous vehicles because only the driver using the vehicle is insured. Victims might have to take vehicle manufacturers to court which would be time consuming and expensive.

“We are creating a new compulsory insurance framework that covers the use of automated vehicles and when the driver has legitimately handed control to the vehicle. This will ensure that victims have quick and easy access to compensation,” Grayling said.

Another crucial issue that needs to be addressed relates to data handling. “It’s clearly a matter for vehicle manufacturers and service providers,” Grayling said.

“There is a regulatory framework in place within the data protection act, but I think we will do more work, need more research on how data should be recorded and how data should be shared,” Grayling explained.

In preparation for the introduction of automated vehicles, UK insurers have set out 10 key features to describe what ‘automated’ means.

The industry wants to see motor manufacturers being absolutely clear about what their vehicles can and cannot do, to prevent customer confusion over their own level of responsibility behind the wheel as vehicles become increasingly advanced.

The list of requirements by the insurance industry include a clear description of the automated capabilities of the cars, that the features include a ‘clear handover,’ that the transfer of driving control follows a clear ‘offer and confirm’ process, and that the features include an emergency intervention, meaning that the vehicles can avoid or prevent an accident by responding to an emergency.

“We will need an affordable and effective insurance framework for this revolution,” Grayling said.

“Insurance will be the enabler that helps the market to grow,” he added.

Paul Ridge, Banking & Insurance Specialist, SAS UK & Ireland, commented: “With new autonomous vehicles hitting the market, it’s imperative that traditional insurance providers ask themselves ‘how can we use this technology to our advantage and not get left behind?’ The answer lies in their data.

“More insurers need to appreciate the value of data and real-time insight these connected cars can provide. There is a torrent of potential data sources being streamed from technologies like Mobileye - these help customers’ vehicles stay in lane and brake in an emergency, for example, and also collect information from installed cameras to continuously update maps that self-driving cars will use. Insurers must be willing to adapt to these changes through product innovation.  Traditional risk pools could reduce, but new areas of demand emerge.  If an autonomous car is involved in an accident with another vehicle while the car and not the driver is in control, then who is at fault?  What new risk do autonomous vehicles present?  These are the key questions that insurers need to explore.

“Whether it’s through in-house innovation or partnerships with InsurTech innovators, success for insurers depends on the ability to analyse and exploit data. Analytics has the power to help incumbent car insurance companies – many of which are established and trusted brands – remain relevant to consumer.”