“But this whole thing is dragging out a lot of questions that people weren’t thinking about.”
I asked those questions years ago, to friends working on the technology. They just waved them off. They assume, I assume, that Google, et al will have the billions of dollars of clout necessary to smooth out tort law in their favor. I expect the car owner will be held liable, insurance rates will go up to cover it, and that will be that.
Once it becomes illegal for operator-controlled vehicles to be driven, liability insurance won’t be necessary since Technology is perfect and robocars will never, ever misbehave or make mistakes. Other forms of insurance (theft, comprehensive) will still be necessary, and rates for those products will be forced up to keep the insurance companies profitable.