Driverless cars on the horizon, but insurers pulling up the rear
Almost every major car maker -- and even companies that don't normally come to mind, such as Tesla and Google -- is in the race to develop a driverless car. It's no longer futuristic "Jetsons"-type stuff. Much of the technology already exists.
Mercedes-Benz's "Intelligent Drive" will launch this month in accident-prone South Africa, while here in the U.S., California, Florida and Nevada already have rules in place defining how driverless cars will operate. Internet giant Google's "Chauffeur" is a veteran road warrior, having endured its first accident -- rear-ended at a traffic light.
Driverless technology is moving ahead because of exploding demand, much of it from drivers overwhelmed by technology that already exists in their cars. The automobile is now a mobile office, and driver distractions are prevalent in almost every new car: a readout screen on the dashboard, pull-down or seatback TV screens, and the overwhelming need to be connected legally, or illegally, by cellphone calls and texts.
Motorists are still responsible for safely keeping their cars on the road, but we’re not doing a very good job. The National Safety Council estimates that cellphone talking and texting cause 1.6 million accidents a year.
Check out this video from A.M. Best TV about the latest driverless car developments:
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Yield to car insurance
Drivers who would like to stop driving, but still want to get where they're going, will want a driverless car. And carmakers are counting on it. But a crucial piece of the puzzle is missing.
Every vehicle, driverless or not, will have to be insured. And, apart from one bill in Michigan to establish liability insurance for driverless vehicles, no one is shifting out of park on this issue. The National Association of Insurance Commissioners (NAIC), comprised of each state's insurance regulators, did not respond to requests for comment.
Car insurers will have to deal with a host of hairpin turns down this road. Here’s just a sampling:
- Car insurance premiums are based largely on a driver's accident history. When there is no history, as with teenage drivers, rates are astronomical. So how will insurers rate the robot behind the wheel of a car?
- Who is really driving a car, you or the robot? For example, you're on your way to Walmart but suddenly decide to stop at a gas station, turning off the robot just as you go through a red light. If an accident occurs, who's responsible and how do you prove it?
- What about multiple-car pileups when one or more cars are driverless?
"Who is culpable for these accidents?" asks spokesperson Loretta Worters of the Insurance Information Institute, which represents the industry. "Right now we have no answers because we have no experience in these situations. Many of the traditional underwriting criteria would not pertain to driverless cars."
Legal feeding frenzy
Just who is responsible will be determined by the law and the court which enforces it. But driverless car accidents are likely to leave even the most judicious judge scratching his or her head over this chicken-and-egg argument. Who was in control? You or the robot?
Unless the law in each state is clearly defined, driverless cars will likely create a feeding frenzy for lawyers who will try to hold the manufacturer, rather than the motorist, liable for an accident. And the reason is obvious: A driver is usually sued only up to the limits of his or her policy, but a lawsuit against a carmaker could net the plaintiff, and his or her attorney, millions more dollars, particularly if the accident can be pegged to a flaw in the driverless design.
This is one reason why the National Highway Traffic Safety Administration (NHTSA) recently told carmakers to slow down the process while it strives to develop a research plan and guidelines for both the industry and the states.
"If driverless cars do become a reality, insurers would need to create a new auto product, and it would need to be approved by state legislators," predicts Worters.
Not waiting for insurance companies
But car makers probably won’t wait for insurance companies to catch up. They could begin manufacturing these vehicles as early as 2015 and intend to have them on the road before the end of the decade, according to most estimates.
Here is a "best guess" on what actually will happen:
- A driver -- like the pilot of a plane -- will have to take some responsibility for whatever happens inside the vehicle, even when it's on autopilot. So it's unlikely that a blind person or child can be in a driverless car without a licensed driver. And the myth that you can be drunk and have the car drive you home is probably just that. You'll still have to undergo a breathalyzer test if you're stopped or in an accident.
- A driverless navigation system will probably function inadequately, if at all, on bumpy, winding roads that lack road signs, white lines and other distinguishing marks. Debris such as branches may fool it into stopping.
- If an accident occurs, don't claim that someone "hacked" into your system and took control like a computer virus. Nissan spokesperson Travis Parman, whose company plans to have a driverless car by 2020, says that Nissan's systems are designed to prevent intrusion and would require a "hardwire interface" that would be even more invasive than a conventional breaking and entering.
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