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article imageHow will driverless cars affect liability and insurance?

By Leigh Goessl     Jun 26, 2012 in Technology
As Google forges ahead with its autonomous driving technology, the full impact of how this it will affect other industries remains to be seen.
Insurance is one of those industries that will undoubtedly be impacted by autonomous vehicles once they land on the consumer market. As progression to driverless cars evolves into reality, it is clear there will be some domino effects of this technology.
At this point it is not "if" driverless cars hit the market, but likely more a matter of "when". In the U.S., states, such as Nevada, have already approved these cars for use on roadways, it is likely other states and countries won't be far behind in passing similar laws.
In the meantime, government and affected industries need to iron out some details to prepare for the coming of autonomous driving being widely used in lieu of traditional driving. There are several issues to weed through, but insurance is bound to be one of the largest industries affected.
Back in April, Popular Science had noted "two big leaps" needed to be made by society in order to "enable truly self-driving cars"; these being technology and insurance, and tech has just about reached fruition.
Many believe that driverless cars will ultimately result in fewer accidents, thus logic stands to say this will decrease insurance claims for accidents. Recently, SearchEngineWatch reported a Bellevue, Washington insurance company called Google's driverless cars "shockingly safe and efficient".
However, when claims do need to be filed, how will this work?
Popular Science noted that society will have to essentially transition from the current driver liability to a manufacturer one. As the driver won't be the one responsible for the car's movements, this responsibility shifts to the builder of the car.
“It’s accepted in our world that there will be a shift,” says Bryant Walker Smith, a legal fellow at Stanford University’s law school and engineering school who studies autonomous-vehicle law, reported Popular Science. “If there’s not a driver, there can’t be driver negligence. The result is a greater share of liability moving to manufacturers.”
While the U.S. is beginning to embrace this technology, eventually it will reach other countries, and they too will have to weave through the tangled web of insurance and how autonomous vehicles will have an impact.
In this week's news, BizCommunity reported, "While it may be some time before the technology reaches South Africa, it is likely to have far-reaching consequences for the insurance industry, if it does become commercialised."
"The extent of motor vehicle accidents remains a serious problem in South Africa and is most often the result of human error," said Warwick Scott-Rodger, marketing manager at MUA Insurance Acceptances . "Consequently, a driverless system could help to eradicate careless and negligent driving behaviour, thereby reducing the number of accidents. If this is the case, and fewer accidents occur, then the cars could also be built lighter, allowing for less fuel consumption."
Scott-Rodger also noted that if this technology is safer, then theoretically the cost of insurance premiums should come down, and create a more competitive environment for insurance companies.
Others are also agreement with this sentiment. reported (via Celent) that insurance premiums could be reduced by 80 percent by the year 2022.
Google has reportedly been in discussions with major insurance companies in regards to the impact its driverless technology will have on society.
"They see the opportunities for this technology being really positive," said Anthony Levandowski, product manager for Google's self-driving car project, in a keynote address at the Society of Automotive Engineers World Congress at Cobo Center in Detroit earlier this year. "From their point of view, this technology is not going to be released until it's safe."
Whether or not driverless cars succeed in the consumer market will depend upon a lot more than whether or not people embrace the technology, Google has to also navigate regulatory and insurance issues. Although, if either entity gets "skittish" over self-driving cars, all bets regarding the success of these vehicles could be off.
More about driverless cars, Cars, autonomous cars, autonomous vehicle, Insurance
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