If you live in Silicon Valley or Washington D.C. for that matter you may have seen a car driving itself down the road. While an autonomous car may seem futuristic they are the wave of the future, and much closer to reality than most people imagine. While Google is the industry leader at this point they are not the only company interested in computer driven cars.
When these cars become a reality, in addition to freeing up your driving time they could have a big effect on your insurance premiums.
Driverless Cars are coming
Autonomous cars are coming; almost all automakers are currently working on driverless or semi-driverless cars. Google is out in front having logged over 200,000 miles on their fleet of Toyota Priuses. They have driven them in the city, on the highway and even on tricky mountain roads, without a single accident that could be blamed on the computer. Audi’s autonomous car navigated itself up Pikes Peak.
While the transition to autonomous vehicles will be slow, the very technology that drives these vehicles may already be in your car. Mercedes and Audi recently unveiled Traffic Jam Assist, which adds automatic steering to their adaptive cruise control. This lets the car drive itself at speeds up to 37 miles per hour. Cadillac is developing Super Cruise, a technology that allows the car to deal with the gas, braking, and steering. Experts predict that we could see fully autonomous vehicles on the road within 10 years.
What are the Benefits?
Safety is the number one benefit of these cars. In 2009 there were 10.8 million accidents which killed 35,900 people, 93 percent of these accidents were caused by human error. Computers never drive drunk, they don’t text and they can react faster than any human driver. Computers don’t get tired and they have a 360-degree view of traffic.
While safety is a key benefit, there are others. Convenience and traffic jams are just a couple worth mentioning. Autonomous cars can drive at the exact same speed mere inches apart which would make a huge difference in commute times. Convenience is another big factor. Imagine the time you could save if your car dropped you off and then parked itself. When the car drives itself you can read, text or simply enjoy the scenery.
Affects on Insurance
So what would happen if everyone were driving an autonomous car? Experts predict that fatalities could fall from around 40,000 per year to 400. This kind of significant drop would have a game changing effect on car insurance. Celent recently released a report entitled, A Scenario: The End of Auto Insurance which looks at what might happen to car insurance rates in a world of driverless cars.
Donald Light, the author of the report suggests that by 2022 auto liability premiums could drop up to 80 percent from 2012 levels. A gradual decline of rates would accelerate as collision avoidance systems combined with automated traffic enforcement take effect around 2018, price drops would continue until liability and collision premiums were a fraction of what they currently are.
In addition to insurance issues there are legal issues. In most states driverless cars are illegal or fall into a gray area. Nevada recently become the first state to specifically legalize and license autonomous vehicles. Other states are following suit.
Once they are on the road other legal issues crop up. Who is responsible when a computer glitch causes a collision? Most legal experts see liability shifting from the car owner back to the vehicle manufacturer, but this is uncharted legal water. As autonomous vehicles become more common both insurance and legal issues will have to be ironed out.
Autonomous vehicles are coming and are closer than most people would imagine. In just 10 years you could be reading, texting or working as your car chauffeurs you wherever you need to go.
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