Self-Driving Cars and Insurance
Each new generation of cars is equipped with more automated features and crash avoidance technology. Indeed, many of today’s high-end cars and some mid-priced ones already have options, such as blind-spot monitoring, forward-collision warnings and lane-departure warnings. These will be the components of tomorrow’s fully automated vehicles. At least one car manufacturer has promised to have fully automated cars available by the end of the decade.
Except that the number of crashes will be greatly reduced, the insurance aspects of this gradual transformation are at present unclear. However, as crash avoidance technology gradually becomes standard equipment, insurers will be able to better determine the extent to which these various components reduce the frequency and cost of accidents. They will also be able to determine whether the accidents that do occur lead to a higher percentage of product liability claims, as claimants blame the manufacturer or suppliers for what went wrong rather than their own behavior. Liability laws might evolve to ensure autonomous vehicle technology advances are not brought to a halt.
- A study by the Insurance Institute for Highway Safety (IIHS) has found that improvements in design and safety technology have led to a lower fatality rate in accidents involving late model cars. The likelihood of a driver dying in a crash of a late model vehicle fell by more than a third over three years, and nine car models had zero fatalities per million registered vehicles. Part of the reason for the lower fatality rate might also stem from the weak economy, which led to reduced driving, the IIHS said.
- The study, which looked at fatalities involving 2011 model year cars over a year of operation, found that there were an average of 28 driver deaths per million vehicle car years through 2012, down from 48 deaths for 2008 model cars through 2009. Eight years ago there were no models with a zero death rate.
- The IIHS attributed the lower death rate to the adoption of electronic stability control, which has reduced the risk of rollovers, and to side airbags and structural changes that improve occupant safety. However, the IIHS said, there was a wide gap between the safest and the least safe models, with the riskiest cars mostly small lower cost models.
- General Motors will offer a super cruise system with hands-free automated driving on freeways that have proper lane markings by 2016. However, drivers will have to be ready to take over control of the vehicle and cars will be fitted with a device designed to alert the driver to pay attention even during highway driving. Toyota said it plans to offer crash-avoidance technology in Toyota and Lexus models by 2017. Daimler is now offering a system on certain models that allows a car to brake, accelerate and remain in its lane without human intervention at speeds of under 16 miles an hour.
- Google, the company that has been the public face of self-driving cars in the United States for the past few years, announced in May 2014 that it is building a fleet of vehicles without a steering wheel or role for a driver because its technology has not been able to successfully switch control back and forth from automated driving to the driver in an emergency and does not expect to be able to accomplish that soon. The prototype will have a top speed of 25 mph and will be summoned by a smartphone, in effect serving as an automated taxi service. Other companies building autonomous cars said that they will continue to work on vehicles that will be able to safely make that switch. Volvo says that it expects to have its cars tested on city streets by ordinary drivers by 2017. However, experts say the size and the cost of the sensors powered by lasers used to steer the driverless cars must be reduced before such cars can be put into mass production.
- A survey by IEEE, a technical professional organization dedicated to advancing technology for humanity, of more than 200 experts in the field of autonomous vehicles found that of six possible roadblocks to the mass adoption of driverless, these three were ranked as the biggest obstacles: legal liability, policymakers and consumer acceptance. Cost, infrastructure and technology were seen as less of a problem. When respondents were asked to specify the year in which some of today’s commonplace equipment will be removed from mass-produced cars, the majority said that rear view mirrors, horns and emergency brakes will be removed by 2030, and steering wheels and gas/brake pedals will follow by 2035.
- In February 2014 federal agencies approved vehicle-to-vehicle (V2V) communications systems that will allow cars to “talk” to each other so that they know where other vehicles are and can compensate for a driver’s inability to make the right crash avoidance decisions because of blind spots or fast moving vehicles. V2V communication uses a very short range radio network that, in effect, provides a 360-degree view of other vehicles in close proximity. The Department of Transportation estimates that safety systems using V2V communications will be able to prevent 76 percent of crashes on the roadway.
- At the end of 2013 Michigan joined California, Florida, Nevada and the District of Columbia as jurisdictions that allow the testing of autonomous vehicles on public roads. Under the Michigan law, drivers of such vehicles must remain in the driver’s seat at all times while the vehicle is on the road so that they can take over in the event the technology fails or there is an emergency. In California, the Association of California Insurance Companies is advocating “for changes clarifying that the autonomous vehicle’s manufacturer retain all liability for damage, losses or injuries caused by the operation of these vehicles as required by the enabling law (SB 1298),” according to Property Casualty Insurer’s Association of America. Other states have considered such proposals. The U.S. Department of Transportation lets states allow limited testing of autonomous vehicles but not sales.
- A study of the benefits self-driving vehicles by the RAND Corporation, released in early 2014, includes discussion of liability insurance options. It suggests that the concept behind no-fault auto insurance laws might become an attractive alternative to tort-based laws as the use of automated vehicles becomes more widespread. The study, “Autonomous Vehicle Technology: A Guide for Policymakers,” also discusses the possibility that product liability cases against manufacturers may inhibit the development of such technology, in which case, the study suggests, laws that incorporate some level of cost-benefit analysis may be adopted, based on the notion that the technology is more likely to reduce human error than to cause it.