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Autonomous Vehicles and Motor Insurance: The Limits of Piccali

Legal Analysis · 4 min read

Piccali offers a useful starting point for analysing the boundaries of motor property cover. Applying it to a driverless vehicle requires a separate examination of the policy, the operating model and the statutory protection of bodily-injury claimants.

ByElis Sivan

Head of Property Practice · Oz Berkovitz Law Office

A vehicle operating without a human driver changes the facts on which motor insurance has traditionally been priced. For a driverless journey, underwriting must address approved operating areas, software, remote supervision and maintenance. Here, autonomous operation means a driverless journey within an authorised operating environment; it does not mean ordinary driver assistance requiring human supervision.

Start with the correct insurance regime

Israeli compulsory motor insurance and motor property insurance must be examined separately. The former supports the statutory bodily-injury compensation framework. Section 15 of the Motor Vehicle Insurance Ordinance invalidates specified restrictions in relation to liabilities requiring compulsory insurance, including restrictions based on driver age or licence duration, and on certain times or areas of use. An age limitation cannot therefore be analysed identically across both classes of insurance. [3]

The Ministry of Justice and Capital Market Authority’s 2024 report considered the existing bodily-injury and property-damage frameworks capable of accommodating autonomous vehicles through interpretation. It recommended retaining those frameworks during trials, with further matters for review. That is an official policy and interpretive position; the report is not itself a new compensation statute. [4]

The final decision in Piccali

The original Supreme Court judgment in Piccali v Hachshara Insurance Company, LCA 9849/17, dated 4 June 2019, treated breach of a driver-age restriction as capable of attracting proportionate insurance benefits under the increased-risk provisions. That was not the final outcome. [1]

On further hearing, in CFH 5325/19 and 5326/19, Hachshara Insurance Company v Piccali, dated 7 July 2021, a three-to-two majority reversed that approach. The case concerned comprehensive and third-party property cover. Permitting a driver below the policy’s specified age fell outside the agreed cover. The majority rejected treating that breach as an increase in an insured risk to which the statutory mechanism for proportionate benefits would apply. The judgments also addressed the possibility of exceptional relief under section 29 of the Insurance Contract Law. [2]

Piccali did not decide whether a driverless vehicle is insured. It supplies an analytical distinction between the scope of the risk purchased and a failure to comply with requirements concerning an insured risk.

How far can the analogy extend?

A property insurer might invoke that distinction where a policy expressly covers only human-controlled operation and an insured instead deploys the vehicle without a driver. Its argument would be that a different operating risk was never insured. Whether that argument succeeds would require examination of the entire wording, the disclosures made, the cover selected and applicable statutory protections.

A different question arises where autonomous operation is expressly insured but an operator misses a maintenance step or fails to install an update. Describing every operational requirement as a boundary of cover would bypass the necessary enquiry into its substance and the legal consequences of non-compliance. Piccali does not remove that enquiry.

Nor should the age of a passenger automatically be substituted for the age of a driver. Where the passenger performs no driving function, applying a driver-age restriction requires a contractual basis. A remote operator’s role must likewise be established from the actual control arrangements.

A hypothetical claim beyond the approved route

Assume a driverless shuttle has property cover specifying an operating zone. A control-centre instruction sends it outside that zone, where it collides with another vehicle. Both property damage and passenger injuries follow.

For the property claim, the analysis would ask whether the zone defines the agreed insured activity or is a precaution attached to otherwise insured operation. The exact wording, underwriting exchanges and reason for the restriction would matter. The bodily-injury claims require their own statutory analysis, including section 15; the property coverage conclusion cannot simply be carried across. This is a hypothetical application, not a reported autonomous-vehicle holding.

Underwrite the operation and preserve its history

Israel’s Traffic Ordinance contains a specific framework for experimental driverless operation, including operating permits, control centres and operational records. The operating permit and insurance policy should be reviewed separately, with any intended connection between their terms stated precisely. [5]

Underwriters should establish the permitted driving mode, operating environment, allocation of remote-control functions and process for approving changes. Policies should address transitions between manual and autonomous operation, material software changes and responsibility for required maintenance. The objective is to identify the service being insured in terms that the operator can implement and the claims team can investigate.

After an accident, the evidence should include control-centre instructions, mode transitions, location data, software versions, maintenance history and relevant sensor records. The investigation should establish the contribution of any system malfunction, control-centre instruction or departure from the operating permit, including how those factors interacted.

Piccali’s practical relevance lies in making the agreed risk explicit before deployment. For autonomous vehicles, a well-defined insurance arrangement must explain who controls the journey, which operation is covered and how changes will be handled, while preserving the separate statutory analysis required for bodily-injury claims.

Sources

Law and sources reviewed as at 24 October 2026. General commentary only; the applicable law, facts and policy wording must be considered in each matter.