On the Road With Autonomous Vehicles and the Insurance Industry, Issue No. 1

by Nelson Brown & Co.

Autonomous vehicles (AVs) are no longer a futuristic concept, but a present day reality. Automobile manufacturers and software companies – Google in particular – have created driverless cars that are being tested on public roads. At some point in the future, although there is debate as to when, driverless cars will be available to the public for use on the roads. Not only will autonomous vehicles change the way people drive, they will also have a significant impact beyond the daily commute. The effects of driverless cars on the insurance industry are far reaching – from technology and underwriting to insurance regulation and liability. The industry will need to understand and look at such issues with a new perspective.


As we look towards a world with self-driving cars, insurers will need to anticipate the effect they will have on underwriting and price as well as the risks they insure. Driverless cars are presumed safer than traditional driver controlled cars, and some data exists to suggest this is true.  Google, among one of the first developers of such automobiles, touts more than half a million miles of accident-free driving on public roads. 

Is such limited data sufficient for insurers to adjust underwriting practices and premium pricing?  And even if accident frequency drops, will claim severity drop as well?  For example, the cost to repair a driverless car with all of the embedded technology will be greater than to repair today’s automobiles. Or, consider the potential for a product defect leading to numerous serious accidents. Before moving forward with new products and rating models for AVs and their manufacturers, insurance actuaries, and product developers will need to evaluate the data and forecasts.


Autonomous vehicle technology could profoundly change the insurance industry. Such technology could alter liability schemes and risks insurers assume when insuring vehicles, vehicle and component manufacturers, and other automotive businesses.  For example, existing and proposed laws protect automobile manufacturers from liability for accidents involving vehicles converted to autonomous use by someone other than the manufacturer. It is yet to be determined how liability schemes and tort law will address the human "driver’s" responsibility for an accident involving vehicles operated by autonomous technology.

Technology in AVs is not only a transportation issue; it is also a cyber risk issue. Technology used in driverless cars can collect data on the operation of the vehicle and its owner and occupants. This presents the risk of hacking or unauthorized use of this data.  Some observers are concerned about the risk of a vehicle being hacked and remotely controlled by the hacker.  Where there is risk, the insurance industry is implicated.


State and federal regulation related to AVs will affect the insurance industry as well. Approval of the use of AVs on public roadways will likely lead to efforts to reform automobile insurance statutes and regulations. One can envision regulatory efforts to require premium pricing discounts for vehicles with driverless technology — the insurance industry will need to be prepared to respond and react.

The road toward widespread use of driverless cars will be an interesting journey. Nelson Levine will be monitoring this journey and providing updates on what lies ahead for the insurance industry in future issues of On the Road With Autonomous Vehicles and the Insurance Industry.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Nelson Brown & Co. | Attorney Advertising

Written by:

Nelson Brown & Co.

Nelson Brown & Co. on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.