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Laws must be updated as driverless cars steer us into complex insurance minefield

The era of driverless cars – or fully autonomous vehicles (AVs) – is near and will dramatically transform how we drive. The technology is well advanced and we already see automated features built into new cars, such as automatic braking, adaptive cruise control, and lane-drift prevention. The test driving of fully AVs (which require no human intervention other than setting the destination and starting the system) has been underway for a number of years and will be on the market as early as 2020.
This new era of autonomous driving will challenge many industries, perhaps the most significant being the motor insurance industry. Reports say 90pc of accidents are caused by driver error and fully AVs will decimate accident frequency.
Undoubtedly accidents will continue, but will have different causes, for example bad weather, animals running onto the road or the technology in the car failing.

The immediate challenge for the insurance industry is to establish what the role of motor insurance will be in this new era. The existing Irish legislative and regulatory framework for motor insurance in Ireland is driver-centric. At present, under the Road Traffic Act 1961, driving is defined as ‘managing and controlling’ a vehicle. This is not appropriate for AVs where the technology, and not the driver, controls the vehicle.
As AVs will likely, at least in the short term, have both manual and computer control, it is easily foreseeable both personal motor insurance and product liability insurance may be required. When accidents occur, it will be necessary for insurers to determine whether it was the technology of the AV or the individual driver who was in control. Claims could therefore be made against a driver, owner of the AV, AV manufacturer or technology suppliers such as software designers or programmers.

From an injured party’s perspective, this may result in protracted costly litigation to secure compensation.
The Irish legislature has not, as of yet, considered this impending development in any meaningful way. At a European level, the European Commission established a high-level group on the automotive industry (GEAR 2030) in 2015, to formulate an action plan for AVs on a harmonised basis across the EU. GEAR 2030 accepts liability in respect of AVs requires clarification and is working towards introducing legislation by 2030.

The motor insurance industry in the UK has faced these issues head-on and has been collaborating with the technology developers to understand the risks and design appropriate new products. Considerable progress has been made, and in February 2017 the UK government published the draft Vehicle Technology and Aviation Bill. It proposes to extend compulsory motor insurance to cover AVs when they are operated in automated mode via a single insurance product that would cover an individual driver when driving, and the AV when in automated mode.
It remains to be seen what position will be adopted in Ireland. The legal landscape will require adaptation to allow for AVs, however as long as traditional motor vehicles remain on Irish roads, the existing position will need to be retained.

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