Last year, insurance was among the top five pressing issues for the trucking sector. High-profile “nuclear verdicts,” extreme weather that endangered cargo, and ongoing pandemic concerns dominated the conversation.
The emergence of autonomous vehicles introduces new complexities to the matter. Truck liability insurance typically covers the costs associated with injuries and damages caused by a driver found at fault in an accident. But what happens when there’s no driver present?
For fully autonomous vehicles, the question shifts from “Who’s liable?” to “What’s to blame?” with sensors, software, and hardware now in the spotlight.
“Most experts agree it’s still a distant concern,” said Mike Birge, president of Hub International Transportation Insurance Services, regarding insurance for autonomous vehicles. “The discussion surrounding whether insurance implications are rooted in technology or operations continues.”
Although companies like TuSimple plan to initiate production as early as 2024, these issues will soon require resolution.
Insurance Varieties
TuSimple is collaborating with Liberty Mutual Insurance to explore how autonomous technology can enhance road safety. “We’re developing an insurance product for the future widespread deployment of autonomous trucks,” stated Robert Brown, TuSimple’s senior director of external affairs.
Mark Friedlander, director of corporate communications for the Insurance Information Institute, identifies several essential insurance coverages for firms dealing with autonomous vehicles:
- Technology Errors and Omissions: Created in response to technological advancements, this insurance covers firms in innovative domains whose products and services may affect third parties.
- Cyber Liability: Provides coverage for financial losses stemming from cyberattacks and other tech-related threats, including data loss and identity theft.
- Directors and Officers Liability: Protects board members and company executives.
- Auto Liability Coverage: Pays for property damage and injuries resulting from an at-fault vehicle accident, typically a legal requirement in most states.
The changing landscape of insurance requirements is still unclear as it relates to various automation levels defined by SAE International. Level 1 involves significant human assistance, while Level 5 indicates full automation without a driver across all conditions.
“There’s no clear timeline for Level 5 vehicles becoming available, but the associated risks will likely be rated higher by insurers than those with Level 2,” Friedlander noted.
Currently, some major AV companies testing their vehicles are self-insured, which means they assume financial risks internally instead of relying on insurance companies. “Large organizations often self-insure frequent minor losses like vehicle damage or minor workplace injuries,” Friedlander explained.
A Potential Need for Public Policy?
The insurance framework for AVs is further complicated by state regulations. Friedlander stated, “Each of the 51 jurisdictions has its unique set of rules regarding auto insurance, including for autonomous vehicles.” He questioned whether the auto insurance system might adapt for greater uniformity with the rise of self-driving cars and whether the federal government might take a more substantial role in this area.
“As vehicles become increasingly automated, the onus might be on the manufacturers to prove they weren’t responsible for what happened in the event of a crash.”
Mark Friedlander
Director of Corporate Communications for the Insurance Information Institute
If manufacturers are held to higher standards of accountability for damages and injuries, they may advocate for increased federal oversight to alleviate the compliance costs related to varying state regulations.
According to Friedlander, analysts anticipate that, over time, autonomous vehicles will be less costly to insure than traditional ones, as the reduction of human error is expected to lead to fewer accidents and fatalities.
