Are You Ready? roadsignWe first began studying the implications of self-driving cars, or “AVs”, two years ago. At that time, observers predicted that fully autonomous “Level 5” cars (i.e., a car with no steering wheel) would not appear in significant numbers until 2030. In 2015, Lux Research observed:

Fully autonomous driving may happen by 2030, but only in highly restricted environments and likely only at low speeds.

That prediction now appears to be well off-target. The world may not be ready for the pace at which AVs come to dominate city streets. Continue Reading The Future Has Arrived for Self-Driving Cars

The crash of a vehicle operating in semi-autonomous or fully autonomous mode presents a headline-grabbing opportunity to question the technology and the pace at which it is being introduced. Every accident resulting in injury or death is a tragedy. In the case of new technology that offers the possibility of dramatically reducing the total number of injuries and deaths, it will be important to look at any individual crash in the context of the overall promise of the technology. For example, it will be important to know how many miles of autonomous driving took place before the first crash occurred and compare that to ordinary cars, where the national average is one fatality every 94 million miles, and the worldwide average is a fatality every 60 million miles.

For our purposes, a crash also presents a scenario for how liability and insurance issues may play out as these cars and trucks start appearing on the road in greater numbers. We’ll walk through what won’t change, and the few things that might. Continue Reading Autonomous Vehicles: A Case Study of Liability and Insurance

On December 16, 2015, the California Department of Motor Vehicles (CA DMV) issued draft regulations for the deployment (not just testing) of autonomous vehicles. When adopted, they may be the first such regulations in the country. The National Highway Transportation Safety Administration (NHTSA) is moving ahead with testing of self-driving technologies in anticipation of setting safety standards. Meanwhile, Google and virtually every major car manufacturer has stepped on the innovation gas pedal to develop self-driving technologies. Will regulators be ready when the cars are? How will the regulation of autonomous vehicles impact the liability landscape and, in turn, how that liability will be insured? Continue Reading Autonomous Vehicles – How Will Regulators Keep Up With The Technology?

Toyota announced that it plans to invest $1 billion in a Silicon Valley research center for artificial intelligence (November 6, 2015). On November 10, Volkswagen said it had hired away from Apple its lead expert on self-driving cars. (Yes, Apple too has a secret car project.) While analysts’ views differ on when, most agree that it is only a matter of time before fully autonomous vehicles become mainstream.

The US Department of Transportation called recent innovations by car manufacturers a “revolution in safety.” Historically, automakers (strongly encouraged by insurers) have focused on engineering vehicles to enhance occupant protection in the event of a crash. That’s why automobiles today have a range of airbags – front, rear, side and even curtains – as well as a long list of safety enhancements, including structural reinforcements to the passenger compartments and advanced safety belts.

Today, vehicle safety has expanded into technologies that help prevent or mitigate crashes. Vehicles can automatically brake to avoid or minimize accidents, self correct steering if the driver wanders out of his or her lane, and can parallel park better than many humans. They do this by means of a variety of sensors, connected to a central computer running sophisticated software. By use of sensors and cameras, today’s modern car can “see” round corners, keep a steady (and safe) distance from the vehicle in front, and anticipate and prevent a crash. All of these technologies, though, still require an attentive driver with hands on the wheel.

Continue Reading Autonomous Vehicles (Part 2) – The Capabilities and Liabilities of Self-Driving Cars

Self-driving cars are coming.  In fact, Tesla Model S owners woke up on the morning of October 15, 2015 to discover that a software download to the cars has made them capable of steering and changing lanes at high speed, slowing and stopping, and self-parking, in “Autopilot” mode.  The future is now, and self-driving cars bring with them a host of unanswered questions relating to safety, liability, and the insurance for protecting against liability.

Over the next few months we’re going to produce a series of articles looking at issues affecting insurance raised by autonomous vehicles, and how those issues may develop and change as the degree of autonomy – and the number and types of autonomous vehicles on the roads – grows.  For many years the insurance industry has been a prime mover in the field of vehicle safety.  One of the main concepts behind the drive to develop autonomous vehicles is to reduce crashes, particularly ones that result in serious injury.  95% of fatalities from car crashes result from human error.  How will the insurance industry keep up, and how will it adapt to the changing scenarios?

Continue Reading Autonomous Vehicles – Where in the (Insurance) World Will They Go?