Many insurance companies recognize the challenges that self-driving cars pose to the insurance industry, but most have made only tentative efforts to address the many issues this new technology raises. As insurance companies look to design coverage for self-driving cars, many factors come into play, which still leave this an unsettled area.
Most states usually require some type of liability insurance. Some also include no-fault or personal injury protection, which takes into account coverage for a person’s own injury in an accident. The purpose of this type of coverage is to avoid expensive legal fights and quickly settle.
Self-driving cars, however, may push the limits of conventional auto insurance, leading to more time-consuming claim settlements. Product liability coverage would appear the most appropriate type for self-driving cars, but it can involve long legal battles and multiple claims.
And there are other issues to consider with product liability. For example, would the product liability coverage of the vehicle’s maker cover all types of accidents, or could the maker retain the rights to sue subcontractors who provided parts and other systems for the vehicle?
Also, the amount of control a driver has over the car could also influence how much liability the driver has compared to the manufacturer. If driver error is cut out of the mix when an accident occurs, claims would fall sharply, and this would necessitate changes in the structure of coverage as well.
Some people have advanced the idea of using a combination of both types of coverage – product liability and auto insurance. But whether this type of merger would work will probably depend on how it aligns with current state insurance and vehicle ownership laws. The thinking behind this idea is it would be a kind of one-size-fits-all policy for both the driver and the manufacturer for accidents involving self-driving cars.
Another idea put forward involves a version of no-fault, which would provide first-party coverage in one policy as part of a movement toward self-driving cars.
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