Autonomous Vehicles

According to the National Highway Traffic Safety Administration (NHTSA),"autonomous" or "self-driving" vehicles are those in which operation of the vehicle occurs without direct driver input to control the steering, acceleration, and braking and are designed so that the driver is not expected to constantly monitor the roadway while operating in self-driving mode. The Insurance Institute for Highway Safety expects there to be 3.5 million self-driving vehicles on U.S. roads by 2025, and 4.5 million by 2030. The institute, though, explains that these vehicles aren’t expected to be fully autonomous but have autonomous capabilities within certain conditions. Additionally, the Institute of Electrical and Electronics Engineers predicts that 75% of cars on the roads in the world will be autonomous by 2040.

Google is the pioneer in autonomous driving technology. In 2005, Google established a team of engineers, led by Sebastian Thrun, who developed a robotic vehicle that won a contest sponsored by the Defense Advanced Research Projects Agency (DARPA). Since 2009, Google (now Waymo), has been test-driving autonomous vehicles on public roads, traveling more than 20 million miles in over 25 U.S. cities. According to previous crash reports, Waymo cars have been in numerous minor accidents, but only one accident in 2016, was reported to be the fault of Google's self-driving car. In 2017, the company removed monthly accidents reports from their site and they will no longer be publicly available.

Waymo continues to be the industry leader in driverless technology. In December of 2018, the company officially launched Waymo One, the nation’s first autonomous vehicle taxi service, in Phoenix, Arizona. In 2022, Waymo announced plans to expand Waymo One services, which will offer rides in San Francisco and Los Angeles, California.

Google believes that self-driving cars can make driving more efficient and safer by eliminating distracted driving and other human error. According to NHTSA, 3,142 fatalities in 2019 were crashes involving distracted drivers, while an additional 10,142 fatalities involved an alcohol-impaired driver. A KMPG report predicts that by 2050, the adoption of autonomous vehicle technology could reduce the frequency of accidents by almost 90%.

As excitement and momentum for self-driving cars grows, there are numerous insurance questions that will need to be addressed before such vehicles take the road. For example: What happens if a self-driving car gets into an accident? Who is liable for the damages? Will the human "copilot" be at fault or will the car's manufacturer? Will the 'driver' have to maintain a constant vigil on the road ahead at all times? What are they allowed to do inside the vehicle…can they nap, read a book or text message while the car does all the navigating? Will they even need a driver's license? A 2017 KMPG report highlights the "chaotic middle" the auto insurance industry is facing in this new period.

There is also a long list of safety and legal issues to iron out before self-driving cars hit the road. In September 2017, the National Highway Traffic Safety Administration (NHTSA) presented, Automated Driving Systems: A Vision for Safety, as part of U.S. Department of Transportation's (DOT) multimodal efforts to support the safe introduction of automation technologies. In July 2018, the U.S. Department of Transportation (DOT) released the Comprehensive Management Plan for Automated Vehicle Initiatives as a response to the requirements in the Consolidated Appropriations Act, 2018 (Omnibus Bill) signed into law on March 23, 2018, directing the (DOT) to conduct research on the development of Automated Vehicles (AV).

Currently, forty-two states and Washington D.C. have enacted legislation related to autonomous vehicles. Getting the technology to make the vehicles is only half the challenge; the other half will be creating a legal, liability and regulatory framework to govern their use on public streets.

Status: The NAIC Innovation and Technology (EX) Task Force is charged with monitoring emerging technologies like autonomous vehicles in the insurance sector. The Task Force provides a forum for discussion of innovation and technology developments in the insurance sector to provide resources for and educate state insurance regulators on how these developments impact consumer protection, insurer, and producer oversight. Additionally, the NAIC Center for Insurance Policy and Research (CIPR) held an Autonomous Vehicle forum in October 2018 and hosted a webinar, The Road Ahead for Autonomous Vehicles and Auto Insurance in December 2019. Both of these events provided insights on the future of insurance in the autonomous vehicle industry.