Automated Vehicle Update: Are You Really Covered If Something Goes Awry?

24/9/2025

With the news that Elon Musk’s Tesla is poised to activate technology known as Full Self Driving (Supervised) in Australia, we’re diving (or driving) into a question that increasingly hovers on the edge of our road (and our minds): if an automated vehicle causes injuries, are you genuinely protected?

From the Wollongong & Sydney’s streets to rural NSW highways, the legal and insurance frameworks we rely upon will be stretched and redefined. Let’s navigate this evolving terrain together.

NSW’s Current Insurance Landscape: A Human-Centric Model

In NSW, the motor insurance scheme remains firmly anchored in fault-based liability. If you cause a crash, your car insurance (whether comprehensive or third-party) handles damage to others and, if comprehensive, to your own vehicle. Compulsory Third Party (CTP) insurances, mandatory for vehicle registration, addresses personal injury liability to others.

Under the Motor Accident Injuries Act 2017(NSW), benefits are payable for an injury where:

the driving of a vehicle; or
a collision, or action taken to avoid a collision with the vehicle; or
the vehicle's running out of control; or
a dangerous situation cause by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control.

This model assumes a human as a driver, and inducing the operation of the vehicle. But in an automated vehicle world, where decisions are delegated to software, sensors, and machine learning, who or what is the ‘driver’? How do you prove liability if you cannot establish a wrongful act or omission of a driver? This model will particularly be lacking as driverless vehicles become commonplace. Fault becomes nebulous and the law, as it currently stands is not well suited to protect injured parties.

Emerging Legal Frameworks & Regulatory Reform

Australia has been slow to consider the relevant regulation required to deal with automated vehicles.

In April 2024, the National Transport Commission (NTC) launched public consultation on the Automated Vehicle Safety Law, which aims to shift legal responsibility from a human driver to a corporate entity—the Automated Driving System Entity (ADSE). The ADSE would be accountable under safety duties for the period the automated vehicle operates on the road.

The NSW parliament passed the Transport Legislation Amendment (Automated Vehicle Trials and Innovation) Act 2017, allowing trial deployment of highly and fully automated vehicles (Levels 3–4), with the goal to gain a better understanding of automated vehicle technology’s capabilities and limitations.

A 2016 policy paper from SIRA concluded that legislative change will be required to deal with the issue of determination of fault.

Liability: Who Bears the Cost When Things Go Wrong?

If you’re in NSW, here’s what to keep in mind:

If you drive a Level 2 automated vehicle (like Tesla Autopilot), the human driver remains responsible—and existing insurance applies. But once a Level 3 or 4 automated vehicle takes over, legal grey zones emerge, which will need to be tested by the courts, unless the parliament steps in to regulate this area.
Manufacturer & Product Liability: Aside from CTP entitlements, injured parties may be able to pursue claims against manufacturers, car dealers or system designers, based on negligence, consumer law, contract law or product liability. These types of claims may prove to be more lucrative as the types and amount of claimable damages may be greater than what is presently available through the existing CTP scheme.

So: Are You Really Covered If It All Goes Wrong?

The short answer: maybe.

If automated vehicle technology fails—and causes injury or loss—the current models of insurance and liability will likely apply, but only with ambiguity.

Ultimately, responsibility could lead back to corporations behind automated vehicle technology, but litigation risk and precedent are nascent.

NSW residents and drivers should monitor legal changes into the future, to ensure that they are protected.

What Should You Do Now?

Stay informed: Watch the NSW regulatory developments. These will shape your legal protection.

Be cautious with self-driving modes: Until automated vehicle law matures, assume you carry ongoing liability, even during automation.

Seek advice early if you are involved in a motor accident involving an automated vehicle.