However a spokeswoman at the Association of British Insurers, which represents insurers, said uncertainty around the introduction of driver-less cars could initially make motor insurance more expensive.
When the new technology is in place it should eventually increase road safety, potentially making policies cheaper over the longer term, she added.
Chris Grayling, the Transport Secretary, said: "Automated vehicles have the potential to transform our roads in the future and make them even safer and easier to use, as well as promising new mobility for those who cannot drive.
"But we must ensure the public is protected in the event of an incident and this week we are introducing the framework to allow insurance for these new technologies."
Edmund King, president at insurance firm AA, said: "There has been much debate about the whether the driver, manufacturer or indeed highway authority would be liable in a driverless collision. This announcement puts the onus on the driver to ensure that they are fully covered."
"This single insurer model will ensure that in the event of a collision, the not-at-fault party will be properly compensated in the way that motor insurance works now."
David Williams, head of underwriting, at AXA UK, another insurer said: "The vast majority of accidents are caused by human error and we see automated vehicles having a massive impact, reducing the number and severity of accidents.
The first driver-less cars are expected to hit Britain's roads in 2020.
Source: www.bing.com
