The Modern Transport Bill addresses insurance issues as driverless technology is set to rollout on London streets, with Volvo to launch its Drive Me London trials next year.
The Association of British Insurers director of general insurance policy, James Dalton, said as more than 90% of accidents are a result of human error, autonomous cars would take a lot of the risk off the roads.
“Fully automated vehicles will be a safety revolution, even more so than the invention of the seatbelt,” Dalton said.
Paul Geddes, CEO of Direct Line Group welcomed the announcement which will allow driverless cars to be insured under ordinary motor policies.
“Driverless cars can make our roads much safer, but it must be executed carefully to ensure full understanding of associated safety technology,” Geddes said.
“The insurance sector has a critical role to play in the development and, in particular, the adoption of this technology and we recognise the potential for automation to potentially disrupt our market and present opportunities for new business models to emerge,” he added.
Dalton said insurers were already working to make insurance policies as straightforward as possible for future technologies.
He added: “The transition from conventional vehicles to a world where drivers become passengers will be the trickiest stage but insurers are committed to supporting the roll-out of this important technology one hundred per cent.”