Driverless Cars: Liability and Insurance Implications
This month’s edition of Best’s Review, the monthly insurance news magazine, discusses the emergence of autonomous (“driverless”) vehicles and the implications for the travelling public and the insurance industry. The reality of driverless cars is drawing nearer. “Several auto manufacturers said autonomous technology could be ready for consumers in the next few years,” reports A.M. Best.
Drivers and insurers alike should take notice. A 2010 National Highway Traffic Safety Administration study found that adding autonomous crash-avoidance systems to vehicles could mitigate up to 81% of vehicle crashes. “Rather than paying out about $14 billion to attorneys, hospitals and others, [insurance carriers] are only going to pay about $7 billion because the car is going to be much safer,” comments Alain Kornhauser, head of Princeton University’s Transportation Program.
Premium savings could be a result. Best’s Review suggests a potential 9% drop in total property/casualty insurance premiums between now and 2017 and a 26% decline from 2018 to 2022.
But until this technology becomes truly road-tested and is allowed to interact with human beings (inside both the driverless vehicle and others), the impact is one big unknown for the experience-driven insurance industry.
The biggest unknown from their perspective and that of the legal community involves liability. In an accident, “who’s at fault … the driver? The car manufacturer? The programmer of the car’s software?” Insurers, legislators, attorneys, and regulators will be sorting that one out for several years. Meanwhile, Best recommends that insurers with a large auto insurance book start contingency planning. By 2040, the Institute of Electrical and Electronics Engineers predicts, autonomous cars will account for up to three-quarters of vehicles on the road.
Please feel free to contact this office with automobile liability or insurance questions.
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