Who Will Insure My Self-Driving Car?

Sean Cunningham by on Jun 08, 2015

googleselfdriveGoogle took a major step towards their goal of creating a fully efficient self-driving car with their recent announcement that a select number of Google’s own two-passenger model will transition from test tracks to actual roads. This is an important moment for Google’s self-driving car project, which has previously only implemented this technology on a select few Lexus RX350 SUVs.


With this exciting technology also comes a number of questions regarding the safety of self-driving cars. The prototypes on the road will be limited to a 25 mile-per-hour speed maximum, but accidents are still bound to happen. Google cites an NHTSA report claiming that 94% of accidents are caused by human error as a primary motivation for the self-driving vehicle, but without a significant sample, there is no way of knowing if a self-driving vehicle is actually safer. The modified self-driving Lexus SUVs have already been involved in 11 crashes, granted they were minor and spanned six years. Still, the safety, reliability and practicality of the self-driving technology has yet to be determined.

If self-driving cars continue to develop to the point where they are available to the public in five years—which is what Google is hoping for—a complicated issue arises for insurance companies. In most accidents, there is a driver at fault, but if a self-driving car is responsible for an accident, how would an agency assess the situation? Eli Lehrer wrote at the Insurance Journal that the fully self-driving cars will result in more product liability claims instead of accident claims, and that the technology, “could lead to a real resurgence in no-fault coverage that’s fading elsewhere.” Still, until the actual safety of self-driving cars is determined through analysis of large sample sizes, insuring self-driving cars will be no easy task.

The safety of self-driving cars is bound to change as the technology continues to develop. While cars are currently only allowed to travel minimal speeds, the ideal self-driving vehicle will be able to travel on highways and faster roads. Google stated in its announced blog post, “When we started… our goal was a vehicle that could shoulder the entire burden of driving. Vehicles that can take anyone from A to B at the push of a button could transform mobility for millions of people.” One can only travel so many places when limited to 25 mph, so clearly Google intends to develop faster self-driving vehicles.

Google is transforming a Jetsons-esque idea into a reality, which they should be lauded for. However, while this new frontier of technology is exciting, it comes with some major questions. It will be interesting to watch how Google’s pod-like innovations respond to the obstacles in their way, and how the insurance industry evaluates the liability and safety of this new mode of transportation.