By Priya Anand
One of the great things about the autonomous cars Google Inc. /quotes/zigman/30194416/delayed/quotes/nls/goog GOOG -0.03% is working on would be not having to worry about turning the steering wheel, hitting the brakes when you approach a light or another vehicle – or even paying attention.
Another likely perk? Driverless cars may shrink your insurance costs.
Human error accounts for more than 90% of car crashes, multiple studies have found. Cars that drive themselves are expected to dramatically reduce that statistic, particularly since Google's version nixes the steering wheel and brakes. "They have sensors that remove blind spots, and they can detect objects out to a distance of more than two football fields in all directions, which is especially helpful on busy streets with lots of intersections," Chris Urmson, director of Google's self-driving car project, wrote in a blog post. Those factors could also largely absolve drivers from liability for accidents, experts say.
"It's possible that more of the liability will shift to the manufacturer," says Robert Hartwig, president of the Insurance Information Institute. "Increasingly, over time, the driver is going to become more and more passive."
That time is still a ways off. Industry experts have estimated 2025 as the year when self-driving vehicles will hit the roads in a mainstream sense. But even then, drive-it-yourself cars will remain: The average age of U.S. cars jumped to a record high of 11.4 years in 2013, according to the automotive data company Polk, which expects that shelf life to keep rising.
Insurance accounts for about 11% of the annual cost of owning a mid-sized sedan, according to an annual report by the auto club AAA.. In Ohio, the state with the lowest average car insurance premiums, drivers pay about $926 a year, a 2014 Insure.com study found. Michigan drivers fork over nearly triple that sum, for an average of $2,551, the highest nationwide.
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While those totals are expected to dwindle if people cede their driving power and become merely passengers, consumers would still need some form of insurance, experts say, for incidents like when a tree falls on a parked car. And the saved premiums could funnel to other car-related expenses -- for example, if driverless vehicles cost more to repair due to specialized technology, or if the upfront purchase price is higher.
The more automated a car is, the easier life will be for insurers. Recorded data could help reconstruct accidents and determine who is at fault, similar to what so-called black box transmitters do in airplanes. And insurance companies and police officers might not have to worry as much about impaired eyesight or altered states of mind if passengers are riding a self-driving car home after a night at a bar or while on prescription drugs.
Americans are divided on whether they would ride in driverless vehicles. The Pew Research Center found last month that 48% of people say they would try it if given the chance, and 50% wouldn't. About half of urbanites and suburb dwellers would be willing to embrace the technology, compared with 36% of rural residents.
Insurance companies might opt to reward drivers-turned-passengers in the automated vehicles, says John Villasenor, a fellow at the Brookings Institution and a professor at the University of California, Los Angeles.
"As we see the commercial availability of safe, autonomous technologies that can significantly improve safety, I think that there will be lots of incentives, including presumably incentives from the insurance companies, to adopt those technologies," he says.
Also see:
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