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BIBA Responded to the Pathway to Driverless Cars: Proposals to support advanced driver assistance systems and automated vehicle technologie

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Pathway to Driverless Cars:

Proposals to support advanced driver assistance systems and automated vehicle technologies 8.9.16

What we are proposing


Question 1A: Do you agree with the proposal to review the regulatory framework to enable the use of advanced driver assistance systems and advanced vehicle technologies as they come to market in the UK? * Yes


It is important that the regulatory framework, including the Road Traffic Act and Highway Code, are suitable for the long term implementation of fully autonomous vehicles on the UK’s roads.


We would like to make a distinction between levels 0,1,2,3 and levels 4 and 5.


We believe levels 0,1,2,3 are catered for by the existing legal system of subrogation, where an Insurer can recover their claim payment from the motor manufacturer, garage, dealer, vehicle repairer, if it were proven they were negligent in regard to the proximate cause of the claim.


This system means the customer enjoys protection by the RTA Insurers and is also compensated by the RTA Insurer for payments to third parties, passengers and accidental damage to the vehicle (where comprehensive cover is selected).


The current RTA position is that the Insurer would not compensate for injuries to the driver of the vehicle they insured, even if not at fault, and it would be down to a legal expenses insurance or the customer’s legal representation to pursue the negligent third party.


With levels 4 and 5 there will need to be reform of the regulatory framework/Road Traffic Act. Here the driver/person in charge of the vehicle is in the hands of the manufacturer – in that the product they are driving is relied upon to be safe to drive. If however there was a fault with the vehicle, then we must see a different framework which delivers robust protection for the customer.


It would be very difficult for the driver/person in charge of the vehicle to establish a fault with the car and take the manufacturer to court. Therefore we would wish to see a change implemented to a motor insurance policy, which would provide compensation to the driver or person in charge of the vehicle for injuries they sustain, and then the Insurer could seek to subrogate from the manufacturer.


It is important that the driver/person in charge would also receive compensation where a vehicle fails in autonomous mode and the driver takes back control of the vehicle but is still unable to prevent the incident.


Current UK law, the Motor Vehicles (Compulsory Insurance) Regulations 1992 and the Employers’ Liability (Compulsory Insurance) Exemption (Amendment) Regulations 1992, is that liability for injury to passengers travelling in motor vehicles arising out of and in the course of their employment fall under motor policies where the liability is an RTA liability.  Consideration of similar protection for the driver/person in charge of an autonomous vehicle being injured in the course of his employment must also be made.


In this regard it is also vital that the customer, their agent and the insurer are permitted unrestricted and immediate access to the information and data from the vehicle, this information should be in a standard, clear, accessible and consistent format. This would be similar to now, where a motor engineer’s report would confirm if the vehicle had brake failure etc. and is important evidence in establishing negligence. This is important as there is a concern over how willing the manufacturer would be to provide an admission of liability. This would ensure a potential block to justice is prevented. E.g. it took Vauxhall some considerable time before they accepted the issues surrounding the Vauxhall Zafira engine fires. The customer should not be left without compensation as they cannot access, what we would say is, their own data.


It is also important that vehicle manufacturers are not permitted to use the ‘State of the Art’ defence to try to deny these claims, so the law must be clear in these cases too.




Question 1B: Do you agree that we should follow a rolling programme of regulatory reviews? * Yes


With the implementation of new technologies and/or methods of using said technologies, it would be prudent for the Department for Transport to periodically review the regulations to ensure that they were fit for purpose and took into account any changes that may have happened since the last review. We would suggest this is done on a regular basis and completed with input via consultation.


These reviews should apply to both the Insurance sector and the vehicle manufacturers and repairers.


Question 1C: In the first wave of regulatory change, with the exception of insurance, should we only consider those advanced driver assistance systems or automated vehicle technologies that are likely to come to the UK market in the next 2-4 years? * Yes


If a rolling programme of reviews were to take place as per Question 1B, this would mean that the Government and respective industries involved with autonomous vehicles would only need to consider technologies likely to come to the UK market. This ensures that the focus of the Government and respective industries is on those technologies UK motorists are most likely to be using.


However as vehicles will be visiting the UK from overseas the Government will still need to be mindful of foreign vehicles with this technology being driven on UK roads.


Question 1D: Are you aware of any upcoming advanced driver assistance systems or automated vehicle technologies which this document does not cover? * Yes Which systems?


We have been made aware of developments surrounding voice control and gesture controls which were not part of this consultation.

Insurance A proportionate response


Question 2A: Do you agree with the proposition to amend road vehicle compulsory insurance primary legislation in Part 6 of the Road Traffic Act 1988 to include product liability for automated vehicles? * Yes



It is vital that the innocent victim of a road traffic accident receives compensation.


For levels 0,1,2,3 we believe the existing legal situation is acceptable.  However for levels 4 and 5 we are also seeking that insurers provide indemnity for losses if the claim is caused by a failure of the autonomous vehicle – whether this be its sensors, programming, cyber hack or anything else.


We understand that Motor Insurers are agreeable to insuring these risks in a standard motor policy and then would seek to subrogate from the negligent manufacturer/ repair garage/ dealer. Therefore it is vital that motor manufacturers share openly with their customer/customer’s broker/ customer’s agent/ customer’s Insurer all the data openly and honestly in order to establish the cause and any culpability. It is also important that manufacturers are not allowed the ‘State of the Art’ defence to try to deny these valid claims.


Products liability insurance policies in their current form are not suitable and are limited in award (which is a challenge considering the current requirement for unlimited personal injury cover under the RTA) and it would therefore be necessary for Insurers to design entirely new products.


The current insurance model was not designed with autonomous vehicles in mind and, should there be a collision with a vehicle employing AVT and that vehicle was at fault; liability would most likely be attached to the manufacturer of the technology that failed, rather than the driver. Therefore for levels 4 and 5 motor Insurers would need to cover these risks and subrogate from the manufacturer and their product liability insurance (or self-insurance).


Therefore the Government should consider legislating to ensure that motor vehicle manufacturers have in force appropriate liability insurance that will respond to claims for autonomous vehicles that may arise in the future, or hold sufficient reserves to be able to indemnify those claims that are being subrogated against them by Insurers.



Question 2B: What, if any, other changes to the insurance framework should be considered to support use of AVT? Why?



Motor policies on-the-whole do not specify cyber cover and this would also need to form part of any changes to a policy for an autonomous vehicle, making it clear that the motor Insurer would indemnify and then seek to subrogate from the negligent party.


Insurance has always been there to compensate the innocent third party. Should a disagreement regarding liability occur between an Insurer and vehicle manufacturer, this would be detrimental to the third party as it may delay the payment of their claim. Therefore, a seamless insurance policy, that would make motor Insurers statutorily liable for accidents while in autonomous mode, would be most suitable for a customer (even if the incident was caused by cyber / product failure) and then allow subrogation against manufacturers.

There would also need to be a model in place to take account of failure due to an error from the garage/dealer/repairer/ service organisation including sufficient limits of indemnity to provide compensation.


We also believe the insurance requirement should remain the responsibility of the ‘user’ which is why we do not think that the manufacturer should deny any claim if the vehicle owner had not uploaded the latest upgrade as this would be out of the hands of the user (see our reply to 2H).


We believe that this model would allow for free competition in the motor insurance market, allowing customers to choose where they buy their insurance and have the necessary protections in place.

The benefits and impacts of changing insurance for automated vehicles


Question 2C: If you are an insurer, vehicle manufacturer or other organisation directly affected by these changes, what costs do you estimate your organisation will incur as a direct result of these changes?


There is a concern within the insurance industry that motor manufacturers will retain information generated by the driver/vehicle and will either enter the motor insurance market with exclusive partners, or charge a premium to access this data. We strongly believe that this would be anti-competitive, uncompetitive and that the data is owned by the customer and should be accessible by the owner of the vehicle or their agent. This would enable the owner to shop around for insurance and help to keep claims costs down – ultimately reflecting in lower premiums. We also believe there is no difference from the current system of Insurers accessing technical reports on the reasons for conventional vehicles failing today.


Question 2D: Do you anticipate the cost of insurance products for vehicles with AVT to be higher than for conventional vehicles? * * No By how much and why?


Currently, 90% of accidents are caused by human error. Therefore, claims frequency should be much lower for vehicles with AVT; however, this must be balanced with the potential increased cost of claim for repair as there will be many technologies, such as expensive sensors, that could be damaged in a collision and may need to be replaced.


The UK motor insurance market made a £31m underwriting loss in 2014 and it last made an underwriting profit in 1994 (source: ABI Key Fact Guide).


We expect there to be more people in an autonomous car, making fewer journeys, ultimately there could be fewer physical vehicles on the road.


Overall, our members expect the total claims cost caused by human error to be dramatically reduced with autonomous vehicles. However, higher damage repair costs and the introduction of a cyber element will offset some of this. We anticipate slightly higher premiums to start with, but a potential reduction over time as the market learns and adjusts with the availability of claims data for actuarial review and the technology becomes more reliable. Therefore in the longer term we anticipate premiums for autonomous vehicles could be less than for a similar conventional vehicle.


Question 2E: Do you anticipate the introduction of vehicles with AVT to increase insurance premiums for conventional vehicles? * No Why?



Once there is a critical mass of vehicles with AVT on the roads, conventional vehicles may also benefit from lower accident rates, therefore lower premiums in the longer term.


Question 2F: What do you estimate the costs will be to insurers, vehicle manufacturers, or other parties of providing product liability cover for automated vehicles, and why?


As these are emerging technologies, there is a lack of actuarial data on which to base price.


There is also a significant build cost for the insurance industry to ensure the infrastructure and products are in place.


Therefore, premiums may be cautiously high initially; however as claims rates/exposure is more understood and there is more availability of products in the market, premiums should start to fall as per 2E


Question 2G: Do you anticipate that this cost will be passed on to the consumer * Yes Why, and by how much?


New Product Liability and Cyber Insurance elements of cover would likely be priced into the motor  insurance policy sold to owners of vehicles with AVT; therefore the customer would benefit from a potential lower accident rate compared to a conventional vehicle, but the cost of this insurance would be passed on to the customer as they pay the premium.


Insurers would also need to consider their ability to recover losses from vehicle manufacturers and also the solvency of vehicle manufacturers, when pricing insurance for an autonomous vehicle

Failure to maintain automated vehicle technology, inappropriate use, and circumventing automated vehicle technology


Question 2H: Do you agree that where a driver attempts to circumvent the automated vehicle technology, or fails to maintain the automated vehicle technology, the insurer should be able to exclude liability to the driver but not to any third parties who are injured as a result? * Yes  Why?


There are two separate issues here, the innocent and the deliberate circumstance when someone has adjusted the AVT.


The proposal would involve amending the current section 148 of the Road Traffic Act regarding avoidance of certain exceptions or securities, but we agree this would be preferable as it would keep the consistency with conventional vehicles that are on the road where a driver is at fault.


So what we would like to see is the innocent third party compensated, but no accidental damage cover for the customer, if they have purposely tampered with their autonomous vehicle deliberately and against manufacturer’s instructions – unless agreed prior to the change.


We also believe that customers must be given sufficient time to update their software and numerous warnings given before any cover is invalidated. Our expectation is that the insurance must have an element in it that will ensure the policy is not invalidated just due to a late software update. Customers must not be prejudiced in these situations.


One further consideration is that new vehicles are only required to submit to an annual MOT after the initial 3 years. With this new technology the DFT may want to consider if this is an appropriate period for AVT vehicles.

Third party hacking


Question 2I: Do you agree that in the event of 3rd party hacking of an automated vehicle, an insurer should not be able to exclude liability, as set out in the Consultation Document? * Yes  Why?


An amendment to the Road Traffic Act would be needed and this would bring vehicles with AVT in line with conventional vehicles.


Although cyber is a developing market with little actuarial information on which to build products, it is crucial, certainly in the case of AVT, that a separate standalone cyber policy would not be the answer and cyber risks should be part of the overall motor insurance policy.


It is likely the effectiveness of the software/firmware in preventing hacking could become one of the rating factors of the vehicle.


Cyber risks should be covered under the motor policy, however if there is a mass cyber-attack from a terrorist or similar type of organisation, taking control of numerous vehicles, then this would need further consideration by the Government in line with other terrorism pooling arrangements .

Product liability and automated vehicles


Question 2J: Do you agree that the product liability and insurance requirements for automated vehicles should:

  • follow the normal rules on product liability with different rules depending on whether the injured party was an individual or a company? ** No
  • be limited by the ‘state of the art’ defence, as set out in the Consultation Document? * No Why?


There should not be any disparity between conventional vehicles and autonomous vehicles on the road. Where a vehicle has been involved in a collision and is at fault, the RTA currently provides that innocent parties are compensated. All types of risk – whether they be failure of the product or cyber should follow the same precedent regardless of if the injured party was an individual or a company.


It is hugely important that the ‘State of the Art’ defence should not apply to product liability for autonomous vehicles. It is important that the innocent party is compensated, whether due to the fault of the driver or vehicle. As we are considering RTA risks, we must remember the reasons the RTA exists and not allow manufacturers any way of not fulfilling their responsibilities in reimbursing Insurers for claims they have paid out for an innocent/injured party. Any manufacturer willing to put autonomous vehicles on the road should take full responsibility for them and be willing to compensate Insurers for their outlay.


Question 2K: Alternatively, should we extend insurance/liability rules specifically for automated vehicles? * Yes Why?


As per 2J


Public sector vehicles


Question 2L: Do you agree with the proposal that, with respect to automated vehicles, the public sector can continue to self-insure but, where they choose to self-insure, they would then be required to step into the insurer’s position in respect of product liability damages? * Yes  Why?


This should replicate the current situation with regards to conventional vehicles.


An alternative option: a first party insurance model


Question 2M: Do you agree that an alternative first party model option would not be proportionate while automated vehicles represent a small proportion of the fleet? * Yes * Why?


The first-party insurance model may not allow Insurers to control costs and could introduce much more litigation to the system, potentially increasing premiums by a significant amount. However, we think a hybrid system is suitable where the Insurer could indemnify the user/driver/ person in control of the autonomous vehicle and then recover from any negligent manufacturer.


Question 2N: What do you anticipate the cost of implementing a first party insurance model would be?


Difficult for the broking community to advise.


Next steps


Question 2O: Do you have data to support your answers on insurance for automated vehicles?


Not at this point in time.


Highway Code and Construction and Use Regulations Highway Code ADAS guidance


Question 3A: What are your views on amending the text of the Highway Code in a way that would clarify rule:

  • 150, related to use of driver assistance systems and distraction?
  • 160, relating to driving with both hands on the wheel?


These rules could be amended, however it would need to be made clear that this was for autonomous vehicles in full autonomous mode so as not to introduce the unintended consequence of encouraging bad driving behaviour. Perhaps this could be done with a separate section in the Highway Code for autonomous vehicles to avoid confusion.


Enabling platooning


Question 3B: Do you agree with the proposition to allow platooning by relaxing Highway Code rule 126 (which recommends a 2 second gap between vehicles)? * Yes * No Why?


To gain the maximum fuel efficiency benefit of platooning (in terms of aerodynamics), the gap should be decided by what is deemed to be the safest distance and this reflected in the Highway Code.


Question 3C: What, if any, other restrictions should be considered regarding use of platooning technologies, and why?


Platooning works best when there are fewest variables and increased predictability of behaviours. Platooning would not be suited to roads where pedestrians have access; therefore our suggestion is that platooning is limited to motorways only.


On motorways at present there are sometimes problems when trying to take the exit at busy times, with slower moving HGV’s preventing access to the inside lane. The technology would need to be adapted so that this would not be a problem for platooning vehicles.


Consideration should be made to allow ‘undertaking’ of autonomous HGV’s platooning on motorways where they are in the middle lane.

In France there is a requirement for HGV’s to leave a gap of at least 50 metres although this is not always complied with.


Driver disengagement/re-engagement following platooning/autonomous driving is an area where it is essential that the technology asks for affirmative action by the driver to take control and, if no response is received within a defined timescale, the vehicle safely pulls in and stops. Such action could then act as an indicator of liability, should an accident occur, as to whether the vehicle or driver/person in charge was in control at the time.

Freeing the driver to make use of the automated vehicle


Question 3D: Do you agree with the proposition that specific and implied driver distraction restrictions are not relaxed at this time? * Yes Why?


A number of different autonomous vehicle providers have different levels of automation. For example, Tesla’s Autosteer function “requires drivers to remain engaged and aware when Autosteer is enabled. Drivers must keep their hands on the steering wheel”.


Relaxing distraction restrictions before level 4 and 5 automation has been proven, and when there is a mix of AVT vehicles on the road, could confuse drivers. This also means that should automation fail in some way during the early days of this technology in the real world, the potential for the driver to intervene would be much reduced.

Construction and Use Regulations Remote control parking


Question 3E: Do you agree with the proposed approach to enable remote control parking by clarifying:

  • Regulation 104 (the driver should be in a position to be able to control the vehicle)? * Yes
  • Regulation 107 (switching off the engine when the vehicle is not attended)? * Yes
  • Regulation 110 (not using hand-held mobile phones while driving)? * Yes Why?


It is important to note that currently, should a driver leave their keys in a vehicle with the engine started such as to warm it up on a cold morning and the vehicle is stolen; this may not be covered under the theft section of a motor policy.  In fact some motor policies will exclude theft if a vehicle is left unsecure or unattended, irrespective of whether the keys are removed.


The example given in the consultation paper, that a vehicle could be remote started to warm it up, would need technologies built into the vehicle ensuring it could not be taken away by anyone other than the owner.


Motorway assist


Question 3F: What are your views on amending Regulation 109 to allow drivers to view TV/display screens displaying information that is not related to the driving task, while driving?


This should not be changed until level 4 and 5 and when full automation has been shown to work for a significant period of time. Additionally, it should be made clear that this is for whilst an autonomous vehicle is in full autonomous mode on the motorway only. There is a risk that this may encourage those who do not have full autonomous mode to have TV/display screens which would be hugely unsafe.


The benefits and impacts of ADAS


Question 3G: Do you have any data or evidence of the safety benefits of these advanced driver assistance systems?


Not at this time


Question 3H: Are there any other, non-safety, impacts (including costs) of ADAS, which we have not covered in this consultation document?


Not at this time


Question 3I: Please supply any data to support your answers.




Summary of top four issues:


  1. A single seamless motor insurance policy should provide indemnity for risks including a failure of the autonomous vehicle through levels 0-5, however caused, including a cyber-attack.
  2. Ensuring the customer and their Insurance Agent/Broker/Insurer has immediate unrestricted access to all data from the autonomous vehicle manufacturer and that the data is in a standard, clear, accessible format.
  3. Ensuring Motor Insurers have a clear and fair right of subrogation against a manufacturer– not allowing manufacturers the ‘State of the Art’ defence.
  4. The driver or person in charge of the autonomous vehicle to be eligible under the Road Traffic Act to receive compensation from their insurance company for their injuries sustained due to a defect in the vehicle whilst in fully autonomous mode (levels 4 and 5).

The post BIBA Responded to the Pathway to Driverless Cars: Proposals to support advanced driver assistance systems and automated vehicle technologie appeared first on British Insurance Brokers' Association.


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