Technology has been breaking down barriers for centuries so much so that the car has all but replaced the horse driven cart. Now, it seems that the self-driving car is starting to replace the driver too. New technologies and capabilities are being developed quickly by various companies but that brings us to an interesting query: Who would be liable to pay for the insurance if a self-driving car is in an accident? Normally, it is at least one of the drivers who is liable to pay but if they were not in charge, is it really their fault?
Right now, the insurance industry doesn’t really have an idea as to how to work it all out. Billionaire investor Warren Buffett who owns insurance giant Geico recently stated that if “a significant portion of the cars on the road are autonomous, it will hurt Geico’s business very significantly.” This quote is based on an assumption that if most or all future cars are autonomous, then there are going to be far less accidents and a lower need for insurance. Not having to take a driver’s history or driving records means that instead of the finger being pointed at them, it is the car manufacturer who will take the blame. Hence, they would take at least a share of the blame.
Other issues that could occur is if there are software bugs in the self-driving cars or it was hacked by an external entity. To better understand how these cars would think, insurance company AXA has been testing driverless cars in various situations where crashes are unavoidable. This will take time and require rigorous study to truly understand how it will all work out. However, for the time being liability will be determined on a case by case basis. As Bryant Smith, a law professor from the University of South Carolina points out the same questions will be asked by insurance companies in the near future “Who was speeding? Was there a stop sign?” and “Did the vehicle fail?”