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Insurance Consideration for Autonomous Vehicles

The recent A.M. Best podcast “The Approaching Wave of Autonomous Vehicles Drives New Risks to Insurers – Episode #154” is timely in light of changing patterns of automobile design and ownership. Those who wonder if the state regulatory system and insurance industry can handle autonomous vehicle development need look no further than Tennessee’s response to problems caused by Uber and self-driving vehicles.

In 2017, Tennessee enacted laws to spell out who would be liable for injuries caused by an “automated driving system” or ADS vehicle. T.C.A. § 55-30-106 declared that liability shall be determined in accordance with product liability law, common law, or other applicable federal or state law. The law goes on to say that when ADS is fully engaged, the ADS shall be considered the driver or operator of the motor vehicle for purposes of determining the liability of the vehicle owner or lessee for alleged personal injury, death, or property damage. This broad-brush legislation will have to be put into finer focus by the courts as incidents arise, but it is a start.

Our legislature apportioned liability and set minimum limits on “digital network transportation” companies, i.e., Uber. Such companies must have a $1,000,000 primary liability policy in effect under TCA 55-12-141 and make sure their operators also have coverage. While we are a long way from Level 4 or 5 autonomous cars, states and insurers appear to be capable of dealing with the issue.

Due to the interstate travel of vehicles, federal law may have to come into play to establish uniform rules of liability and insurance limits. For the moment, courts and insurers will have to deal with cases as they emerge.