With driverless cars already being tested on Australian roads, how will insurers tackle cover for personal injury? That’s the key question raised by a discussion paper issued today by the National Transport Commission (NTC).

The commission has been charged with tackling the personal injury insurance implications of driverless cars, as liability potentially shifts away from people to machines.

The paper outlines options for compulsory third party (CTP) reforms to ensure injuries from automated vehicle crashes are covered.

It identifies likely barriers to accessing compensation under existing schemes set up under varying state laws, and seeks views on reforms to cater for the emerging technology.

“In general, these laws were set up to cover injuries caused by human error rather than product faults,” NTC Acting Chief Executive Geoff Allan said.

“Laws in most states and territories do not contemplate a non-human driver controlling a vehicle. In addition several jurisdictions require human fault to be proved for compensation to be paid.”

In fault-based schemes, even if it is considered to be “driving”, a machine cannot be negligent, the discussion paper says.

Options include relying on the existing framework, expanding all schemes to cover injuries caused by an automated vehicle, a purpose-built scheme and allowing private insurers to cover property damage and personal injury cover.

“We welcome submissions from insurers, manufacturers, legal experts, academics and individuals,” Dr Allan said.

Heads of motor accident injury schemes have agreed that whatever model is decided upon, no person should be worse off if they are injured by an automated vehicle, compared with an accident where a person is in control.

The discussion paper says expanding existing schemes so injuries would be covered in an automated vehicle crash would be the simplest option in the short-to-medium term.

Under the option, insurers would have rights of recovery against manufacturers, but the paper says it could be complex to establish negligence and product liability. A modification could involve a national reinsurance pool funded with contributions from all parties, including manufacturers and telecommunications providers.

Submissions will be open until December 12, with recommendations due to transport ministers next May.