Government responds to driverless car consultation

In an official response to a consultation on driverless cars last year, the Department for Transport said it will proceed to make the minimum legislative changes required to enable the market to develop appropriate autonomous vehicle insurance products.

However, the government says that after listening to both the insurance industry and lawyers, it will extend compulsory motor vehicle insurance, "creating a single insurer model to protect victims where a driverless vehicle causes a crash in automated mode".

Under the model, the victim will have a direct right against the motor insurer, and the insurer in turn will have a right of recovery against the responsible party.

When a crash is determined to have been caused by an autonomous vehicle in automated mode, the insurer will be liable to pay compensation to the innocent third party victim, and to the motorist if injured.

The insurer will only be able to exclude this liability to the injured motorist if the crash resulted from the motorist having made unauthorised modifications to their vehicle's operating system, or failing to install required updates to the software for the vehicle's operating system.

Jonathan Dye, head of motor insurance, Allianz Insurance said: "We are still considering the detail in the Department's response but it seems that a number of key uncertainties relating to liability when the vehicle is in autonomous mode have now been clarified and are in line with the industry's preferred outcome."