Who Will Pay for Damages Caused by Autonomous Vehicles?

The Wall Street Journal ran an interesting story on March 22, 2018 regarding how insurance companies are reacting to the development of self-driving cars.


Insurance companies collect $230 billion in premiums each year. They obviously have a big stake in what happens. At least in theory, autonomous vehicles will reduce or eliminate wrecks caused by human error. Human error is believed to cause at least 94% of wrecks. What will happen if safety improved to the point that premium income drops dramatically? That could be disastrous to the insurance industry.


The Wall Street Journal article points out that states have not even begun to tackle the question of how to shift from imposing liability upon individuals who cause wrecks to imposing liability upon automobile manufacturers, technology companies, suppliers of parts and services, and data providers. This will be a monumental public policy question that will have far reaching legal, economic and personal consequences.


Needless to say, insurance companies, with $230 billion at stake, are not passive observers of what is going on. They are already devising new insurance products and they will ultimately have a big say in what happens in legislatures across the country.



Photo Credit: Nikolay Frolochkin