Urgent ‘overhaul’ of car insurance and motor laws needed before autonomous vehicle influx

Tom Watson

Friday 12 January 2018

Autonomous vehicles could be part of mainstream Australian life far sooner than many may expect, with a new report urging for legislative action and changes to car insurance in order to accommodate for a ‘high level’ of automation on Australian roads in the next five years.

Urgent ‘overhaul’ of car insurance and motor laws needed before autonomous vehicle influx

The ‘Transforming Mobility’ report - a joint initiative from the NRMA, PricewaterhouseCoopers (PwC) and Keolis Downer - highlighted the need for over 50 Federal and state laws, including traffic fines and CTP insurance to be brought up to speed before widespread automation is rolled out.  

Tim Trumper, NRMA Chairman-Elect, said it was crucial that Australia follow the lead of other countries in keeping up pace with emerging technology.  

“We know that autonomous and electric vehicles are coming to Australia soon and that the benefits to society are extensive, however, as outlined in Transforming Mobility we have a way to go to position Australia’s laws to be ready for this significant transformation,” Mr Trumper said.

“This important piece of work conducted by the NRMA, Keolis Downer and PwC provides Federal and State Governments with a useful blueprint to prepare Australia for its inevitable transport future.”

RELATED: Driverless cars could cut insurance premiums by 80%

Amending the law

According to the report, under current Federal and state legislation there are no provisions for non-human drivers - a fundamental fact that will need to be addressed in order for computer-piloted cars to hit the road en mass.

There will also need to be significant changes to existing traffic laws in regard to future fines and penalties. Currently falling on the human driver of the car, the introduction of self-driving cars could shift the responsibility of infractions to the registered operator of an autonomous vehicle.

Reduced car insurance  

In 2016, a study from the Boston Consulting Group (BCG) and Morgan Stanley suggested that car insurance premiums could be cut in the future by as much as 80% thanks, in part, to the introduction of autonomous cars.

While the Transforming Mobility report also stressed the likelihood of a ‘significant reduction’ to comprehensive insurance premiums, it did warn that serious changes to the current CTP (compulsory third party) insurance system would be needed in order to ensure that drivers, passengers and pedestrians would be adequately protected in the event of an accident caused by an autonomous vehicle.

RELATED: Self-driving cars prompt review of car insurance rules

With the report predicting that ‘full automation’ will occur in Australia within the next ten years, Lead transport law partner at PwC Australia, Owen Hayford, stated that changes needed to occur sooner rather than later.

“The changes that need to be made to our road rules and other traffic laws to allow an autonomous driving system to do the driving are straightforward and could be enacted next year,” he said.

“However, changes to CTP insurance regimes to ensure that victims of accidents caused by driverless vehicles have equivalent access to timely compensation, and mechanisms to ensure that premiums for product liability cover are not paid for by vehicle owners, will require more thought.”

While autonomous cars are still a little way off hitting Aussie roads, drivers can still make sure their vehicles and valuables are protected in the meantime with comprehensive car insurance. To compare a range of deals head over the to our car insurance comparison page.

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