Driverless Vehicles and the Effect on Insurance [DRI For The Defense]

Julia Molander and Yevgenia Wiener of the Global Insurance Department discuss driverless vehicles and insurance law, facing revolutionary changes in DRI For The Defense. Driverless cars are no longer a dream. The first major autonomous feature in an automobile was introduced in the 1970s, in the form of cruise control. Since then, many more computerized functions have been added to cars, making them safer than ever before. Anti-lock brakes, electronic stability control (ESC), automated braking, side sensors that detect proximity to neighboring vehicles, and rearview cameras are among many of the new functions that have added to the safety of cars.

As a result of autonomous vehicles, we are facing revolutionary changes in the liability and insurance schemes that govern vehicle accidents. The old system had simplicity in its favor. Drivers had to carry minimum coverage to be licensed. Driver negligence was the usual cause of accidents. When defective design of a vehicle was involved, many plaintiffs chose to forego a product liability claim because of the expense of proving liability.

If drivers no longer operate vehicles, the injured parties are left with product liability as the most likely path to recovery. Lawsuits may result less frequently but they may become more expensive. Insurance may not be available for recovery of damages. As regulators grapple with licensing and permitting of vehicles, they will have to consider the appropriate ways to compensate people for their injuries. In the meantime, the insurance industry will have to plan for significant changes.

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