As self-driving cars hit the road, innovation is outpacing insurance

July 4: Advances in self-driving car technology have gotten ahead of insurers’ ability to factor the systems into auto premiums.

So at least for now, coverage for cars using self-driving technology works the same way as coverage for traditional vehicles, according to the insurance industry.

A recent fatality involving a Tesla Model S electric sedan using the company’s Autopilot system has focused attention on the risks of new “autonomous driving” technology. But the insurance claims process for cars using the systems generally works the same way as for cars without them, said Robert Hartwig, president of the Insurance Information Institute, an industry group.

That is, when an investigation of the accident is completed, the insurer of the driver at fault pays for injuries and damage to the others, up to the limits of the policy. (Hartwig said he was speaking generally, and was not privy to the details of any applicable insurance in the Tesla accident.)

While there is a potential question about whether the driver or the software was at fault, he said, in practice the insurer would typically pay the claim and then have the right to “subrogate,” or file a claim against someone else, like the manufacturer or another insurer, to recoup its payment. (There is no exclusion in auto policies for software defects, he said.)

Khobi Brooklyn, a Tesla spokeswoman, said in an emailed statement that the company’s Autopilot system “does not turn a Tesla into an autonomous vehicle and does not allow the driver to abdicate responsibility.”

Tesla markets its cars to the public, and drivers generally must carry state-mandated minimum liability insurance, which pays for damage to other people, cars and property. (New Hampshire is the sole state that doesn’t require liability coverage.)

However, Hartwig said, insurers may not know they are providing coverage for a potentially self-driving car. Generally, the owner of a new car contacts the insurer to request a quote for coverage. The owner typically provides the vehicle identification number, which identifies the specific make and model of the car — in this case, a Tesla Model S. But the identification number would not necessarily inform the insurer of the various options chosen on the car, Hartwig said, or whether the owner had activated the Autopilot software.

Insurers are likely to begin inquiring about those details more often, he said.

Paul Grieco, a lawyer representing the family of the deceased Tesla driver, Joshua Brown, said on Sunday that Brown had a “standard” auto insurance policy covering the Tesla, but he declined to identify the carrier.

Brown, 40, of Canton, Ohio, was killed on May 7 when the Tesla he was operating collided with a tractortrailer in Williston, Florida. Tesla has confirmed that the Autopilot feature, which the company described as being in a “public beta” test, was activated before the crash.

Florida authorities and the National Highway Traffic Safety Administration are investigating.

There are proportionally few cars with self-driving features currently on the road, so the issue is a new one. Fewer than a dozen states, including Florida, have enacted regulations specifically addressing self-driving cars, according to the National Conference of State Legislatures.

Many truly self-driving cars are part of fleets being tested by auto manufacturers or companies like Google, rather than cars sold to private buyers.