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Government Embraces Driverless Cars. Will Insurance Companies?

As driverless cars enter the scene, the United States Department of Transportation (DOT) has already been at work on plans to reduce conflicting local rules by actively welcoming the adoption of more driverless highways -- and the anticipated reduction in traffic deaths that should follow.

The Obama Administration's position is that the companies who are now, and in the near future, developing this technology should have clear guidelines laid out by the federal government to certify that the vehicles are prepared to enter the U.S. roadways. Due to the emerging nature of the technology, however, the government is recommending that manufacturers come together to standardize certian elements within their industry. 

The Recommendation

The DOT encourages these automakers to submit a 15 point "safety assessment", which would outline their testing processes and how cars are programmed to obey current traffic laws. The plan is also expected to include a detailed plan to prevent vehicle hacking, which is a major concern.

This approach by the administration is that of a suggestion to the large manufacturers, rather than firm regulations. There will be no legal teeth until recommendations are passed into law by Congress, if taken up by the Senate and House of Representatives. The concern, however, is that the technology is moving so fast. By the time government-mandated guidelines are in place the technology has already advanced ahead. By making recommendations now - before laws have been passed, the safety assessments can keep pace with the evolving technology.

Sharing Crash Data

U.S. Officials are hopeful that this will encourage the sharing of crash data and systems development to further traffic safety for all. The existing regulations focus on the needs of human drivers, such as brakes, steering systems, seatbelts, etc. But because the technology is so new and diverse, what to share and where to share is unclear.

But while there are still some unknowns, such steps taken by the Administration show a clear endorsement of autonomous cars as a way to make our roads safer.

The Industry Response

The industry response has been largely amicable, with one major lobbying group lauding the new policy for its efforts to seek standardization across the 50 states, incentivize innovation and support real world testing. They have long been concerned about dealing with the conflicting regulations throughout the country. California, for example, had proposed requiring special testing and licensure process.

Standardization Efforts

While the Administration's stance is not to overstep in the matter of state's rights, they are encouraging states to continue to regulate licensure and traffic law as they allow safety to be regulated at a federal level. This will have major implications for auto insurance providers, as each state currently regulates insurance independently. Officials did go as far as to say that they would consider exemptions to rules for technologies that demonstrated a strong safety benefit potential.

A Different Kind Of Approach

This whole approach to this emerging technology shows a desire to welcome it with an open-ended methodology rather than rigid regulation to encourage the industry rather than hamper it. They were clear, however, that regulators would investigate and urge recalls when the safety of the American Consumer is largely at risk. But with researchers finding that the adoption of driverless cars may slash traffic deaths, which exceeded 35,000 in 2015 -- and largely attributable to distracted drivers -- the Administration sees this as a winning proposition for drivers and passgengers using our roads across the country.

The Response To This Emerging Technology

The American Driver is already embracing driver-assistive technologies that may become the foundation for tomorrow's driverless cars, such as automatic braking, lane-assists, parking assist, adaptive cruise control. There is much excitement around the testing of driverless cars by Uber in Pittsburgh. Uber and Lyft plan to test an entire fleet in the near future.

The automobile insurance industry, however, still has many issues to review, including liability for damages in the event of serious injury or fatality accident involving a driverless car. Will the car owner face a possible lawsuit? Or will the manufacturer be responsibility for technology that didn't work exactly as intended?

The Outlook

It's no longer the distant future. Driverless cars are here. The forecast by industry experts is that ride-sharing autonomous- vehicles will nearly wipe out car ownership in most cities within a decade. A few years after that, and it's likely that rural communities will also begin seeing them on roads and highways.

Some companies are taking a stepping stone approach by developing these assistive technologies while others say the only way forward is to completely take driver error out of the equation. Others are looking for a balance, allowing vehicles to be autonomous only in certain conditions, much like autopilot is only engaged when a plane reaches a certain altitude in certain conditions.

Just what the future may look like is hard to say. But we will face an exciting and yet unknown time. And we will need to hold the industry accountable to our safety and the safety of those we love. 

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