If you don’t already know, self-driving cars have been cruising the California roads for over six years now. In fact, the Wall Street Journal reported that Google’s self-driving car fleet is due to expand its reach to public roads. But will self-driving cars eventually lead to ultra-cheap car insurance? Or maybe no car insurance at all?
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The Current Situation
Up until 2014, the United Nations actually had a regulation that required cars to be maneuvered by drivers. The UN’s new resolution states that cars may be autonomous, as long as a driver is present to take over driving at a moment’s notice.
The interesting thing, according to CNET, is that the UN resolution doesn’t apply to the United States. In the U.S., four states (CA, NV, FL, and MI) as well as the District of Columbia have legalized autonomous cars for testing purposes. Eleven additional states are still deliberating on the subject, while another 12 have already made self-driving cars illegal.
Looking To The Future
Some experts believe that in the not too distant future (around 2040) autonomous cars will be commonplace. This will mean less cars on the road since you won’t have to worry about parking. Instead, cars will drive themselves all over the place picking people up and dropping people off. Why own a car when you’ll always be able to get a cheap ride?
Are Self-Driving Cars Safe?
So far, autonomous cars have been reported to be extremely safe. According to the Wall Street Journal article, Google’s test fleet was in 11 fender benders over six years, and none of the accidents were the Google cars’ fault. The truth is, humans are much more accident prone than machines. So what does this mean for the car insurance industry?
Who Will Pay?
One of the main issues being debated has to do with liability. Many envision that car manufacturers will have to start paying insurance bills since accidents will be caused by technical failures, not human error. This would likely mean very cheap car insurance for the average person. Some even speculate that the low accident rates will make the car insurance industry disappear.
This is unlikely for a few reasons. First of all, 100% accident free roadways will never be possible. Also, if cars are safer, there will be fewer claims for insurance companies to pay. So even if rates are low, there will still be business for car insurance providers.
Bumpy Road For Now
Self-driving car technology may be advancing smoothly, but there appears to be issues with regulation. For example, the exact definition of a driverless car has yet to be clearly established. Still, most developers are optimistic that the future will see fewer cars doing more work and freeing people to concentrate on other things than driving.
No matter what, the future promises big changes. Currently, the average car spends most of its time parked. At the very least, fleets of self-driving shuttle cars will dramatically impact the fuel, manufacturing, and shipping industries. And imagine how liberating it will be to turn over the carpooling duties to your car.
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Published in CARCHEX Auto Insurance Resources by CARCHEX on May 19, 2015