Hacker attacks or faulty software could shift the burden of legal and regulatory liability toward makers of self-driving cars and away from customers, experts say, forcing regulators and insurers to develop new models.
Autonomous cars have the potential to reduce the rate of traffic accidents as sensors and software give a car faster and better reflexes to prevent a collision. However, a greater level of automation increases the need for cyber security and sophisticated software, experts said.
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Google's self-driving Lexus car drives along street during a demonstration at Google campus on Wednesday, May 13, 2015, in Mountain View, Calif. (AP Photo/Tony Avelar)
In this May 13, 2015 photo, Google's new self-driving prototype car is presented during a demonstration at the Google campus in Mountain View, Calif. The car, which needs no gas pedal or steering wheel, will make its debut on public roads this summer. (AP Photo/Tony Avelar)
People exit Daimler's Freightliner Inspiration self-driving truck after a demonstration Wednesday, May 6, 2015, in Las Vegas. Although much attention has been paid to autonomous vehicles being developed by Google and traditional car companies, Daimler believes that automated tractor-trailers will be rolling along highways before self-driving cars are cruising around the suburbs. (AP Photo/John Locher)
In this photo taken Wednesday, May 14, 2014, a camera is shown inside a Google self-driving car on exhibit at the Computer History Museum in Mountain View, Calif. Four years ago, the Google team developing cars which can drive themselves became convinced that, sooner than later, the technology would be ready for the masses. There was just one problem: Driverless cars almost certainly were illegal.(AP Photo/Eric Risberg)
Some of the computer equipment that is used for autonomous operation is seen in a storage area in this Cadillac SRX that was modified by Carnegie Mellon University as it is parked in a lot in Cranberry, Pa., Butler County, on Wednesday, Sept. 4, 2013. U.S. Rep. Bill Shuster, and Barry Schoch, secretary of the Pennsylvania Department of Transportation, then rode in the self-driven car that went along local roads and highways operated by a computer that used inputs from radars, laser rangefinders, and infrared cameras as it made a 33-mile trip to the Pittsburgh International Airport. A Carnegie Mellon engineer was in the driver's seat as a safety precaution. (AP Photo/Keith Srakocic)
Graphic shows some details on the FreightlinerÃ¢â¬â¢s first autopilot driverless truck; 2c x 3 inches; 96.3 mm x 76 mm;
This handout photo provided by the US Secret Service appears to be a Parrot BeBop drone, seen in Lafayette Park across from the White House in Washington, Thursday, May 14, 2015. The U.S. Secret Service apprehended a man who was flying the small drone Thursday afternoon in a park outside the White House. (US Secret Service via AP)
File - In this Oct. 15, 2014, file photo, a drone called the RMAX, a remotely piloted helicopter, sprays water over grapevines during a demonstration of it's aerial application capabilities at the University of California, Davis' Oakville Station test vineyard in Oakville, Calif. The drone large enough to carry tanks of fertilizers and pesticides has won rare approval from federal authorities to spray crops in the United States, officials said Tuesday, May 5, 2015. (AP Photo/Rich Pedroncelli, File)
FILE - In this June 6, 2013 file photo, University of North Dakota aviation student Logan Lass lifts a lightweight drone used in training at the school's unmanned aircraft program in Grand Forks, N.D. Construction is schedule to begin in May 2015 for the nationâs first unmanned aircraft business park, called Grand Sky, to be located at nearby Grand Forks Air Force Base. It will have access to talent at the base, the UND aerospace school and a nearby technical school. The 1.2 million-square-foot park will have space for hangars, offices, shops, laboratories and data centers. (AP Photo/Dave Kolpack, File)
In this photo taken Thursday, March 19, 2015, a six-bladed drone casts a shadow on a heavily looted 5,000-year-old cemetery, known as Fifa, in southern Jordan. At the sprawling Bronze Age site, archaeologists have developed a unique way of peering into the murky world of antiquities looting: With aerial photographs taken by the drone, researchers are mapping exactly where and roughly when new tombs were robbed. (AP Photo/Sam McNeil)
Romeo Durscher, director of education for drone-maker DJI, flies one of his company's products Tuesday, March 10, 2015, in Davenport , Calif. Top drone-makers, along with investors, regulators and inventors, are gathering in one of the most popular regions for outdoor activity in the U.S., Californiaâs Central Coast, to show off their devices, hear about new uses for airborne robots, and hit the waves and trails at the Drones Data X Conference in Santa Cruz, Calif., from May 1 to 3, 2015. (AP Photo/Marcio Jose Sanchez)
This handout photo provided by the US Secret Service shows the drone that crashed onto the White House grounds in Washington, Monday, Jan. 26, 2015. A small drone flying low to the ground crashed onto the White House grounds before dawn Monday, triggering a major emergency response and raising fresh questions about security at the presidential mansion. A man later came forward to say he was responsible and didn't mean to fly it over the complex. The man contacted the Secret Service after reports of the crash spread in the media, a U.S. official said. The man told the agency that he had been flying the drone recreationally. The man is a Washington resident and is cooperating with investigators. (AP Photo/US Secret Service)
In this Thursday, Sept. 26, 2013, photo, Decatur Self Storage's array of solar cells are installed on the flat roof of the building as they capture solar energy and convert it to electrical energy for the storage facility, in in Decatur, Ga. Owner Mike Easterwood also returns excess electricity to the Georgia Power Company electrical grid in exchange for a reduced monthly power rate. (AP Photo/David Tulis)
KNUTSFORD, ENGLAND - OCTOBER 13: A youth poses as he rides a hoverboard, which are also known as self-balancing scooters and balance boards, on October 13, 2015 in Knutsford, England. The British Crown Prosecution Service have declared that the devices are illegal as they are are too unsafe to ride on the road, and too dangerous to ride on the pavement. (Photo by Christopher Furlong/Getty Images)
In this Oct. 30, 2014 photo, Arx Pax engineer Garrett Foshay stands over a Hendo Hoverboard in Los Gatos, Calif. Skateboarding is going airborne this fall with the launch of the first real commercially marketed hoverboard which uses magnetics to float about an inch off the ground. (AP Photo/Jeff Chiu)
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"Although accident rates will theoretically fall, new risks will come with autonomous vehicles," said Domenico Savarese, Group head of Proposition Development and Telematics at Zurich Insurance.
"What should be done in the case of a faulty software algorithm? Should manufacturers be required to monitor vehicles post-sale in the case of a malfunction or a hacker attack?" Savarese asked.
While established models for assigning liability - such as holding the owner responsible for what the car does - will still be relevant, the onus may shift toward manufacturers.
Greater automation may also change consumer behavior and affect insurance costs if drivers become less vigilant and less practiced in their ability to avert an accident.
"Could a manufacturer become liable if a distracted driver causes an accident while relying on autopilot? It's too early to tell," Savarese said, adding that increased liability would unlikely deter carmakers since customers were demanding more self-driving functions.
Software and connected cars are creating new opportunities for insurance companies to customize policies to clients.
"You could pay for how much you drive, or get a lower premium based on how well you drive," Savarese said, adding that these policies will only be made possible if the client allows the insurer to monitor them.
Without driver consent, the insurer will have no right to spy on the driver, not even for exceeding the speed limit.
"We do not want to be big brother, or big puppeteer," Savarese said.
If customers buy in to the idea of lower premiums in exchange for higher monitoring, they can opt to have some sort of black box device installed in their car or via their smartphone.
It will take until 2025 for fully autonomous cars to emerge, Boston Consulting Group senior partner Nikolaus Lang said, adding that carmakers will have to pave the way for winning over regulators by showing they have invested to make their cars less vulnerable to hacker attacks.