6 Jun 23

Fleets may need product liability insurance for vehicles with ADAS

Fleets face the prospect of requiring new forms of vehicle insurance as advanced driver assistance systems (ADAS) change the nature of liability in an accident, according to Europe’s insurers.

The annual report of Insurance Europe, which represents the continent’s insurers, warns that systems such as lane departure warnings, adaptive cruise control and automatic emergency braking could involve a shift from traditional motor third-party liability insurance (MTPL) to product liability insurance. This is due to the increasing difficulty in determining whether an accident is caused by human error or an ADAS malfunction.

“This could lead to motor insurers making increasing use of a right of recourse to product liability insurers to recover the amount of the policyholder’s claim,” said Daniel John, Chair, Motor Working Group, Insurance Europe and Head of non-life actuarial department, HUK Coburg in Germany.

New risks

He also warned that while ADAS have the potential to enhance road safety by detecting and reacting to hazards, they also posed new risks if drivers become over reliant on the technology and lose focus on the road.

Repairs to ADAS equipped vehicles are proving more expensive, due to sensors and cameras being placed in vulnerable positions and needing recalibration after repair.

Access to vehicle data

And John reiterated the insurance industry’s call for greater access to ADAS data, which would give insurers a better understanding of repair costs and vehicle value, as well allowing it to price policies more accurately by offering usage-based insurance that rewards safer driving behaviours.

“However, currently, access to such data is difficult as vehicle manufacturers use proprietary software and diagnostic tools to control and extract the data, limiting third-party service providers’ access to it,” he said, adding that insurers need an EU-level legislative framework that puts drivers in control of their data so they are free to share it.

“A legislative initiative must urgently be put forward by the European Commission to create a safe and efficient environment for the integration of ADAS technology and ensure equal access to vehicle data,” said John.


Image: Shutterstock

Authored by: Jonathan Manning