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Will Google’s Driverless Cars Crash the Auto Insurance Industry?

Driverless Cars like the one being developed by Google have caught the imaginations of lots of experts within the auto industry. Among the many other questions, insurance experts ask whether they mean the end of auto insurance as we know it.

Just like the Jetsons’ flying car in the 1960s, Google’s self-driving prototypes have the public asking “when will we get those?” But by allowing drivers to take their hands off the wheel, Google’s driverless cars may create a nightmare for auto insurers.

A recent study by the RAND Corporation predicts that automated vehicles could cause a rise in auto manufacturers’ liability while personal liability by drivers could plummet. That’s because accidents between automated vehicles comes down to a programming or manufacturing error. But where a driver is involved, human error accounts for 90% of road accidents.

The good news for consumers is that self-driving vehicles could significantly reduce the risk of car crashes. That could translate into lower insurance premiums.

But some experts predict that driverless vehicles will exchange frequency with cost – and that those accidents that do happen will cost a lot more to repair. Pete Kuhnmench of the Insurance Institute of Michigan goes as far as to question “whether the reduction in the number of crashes will lead to a decrease in the cost of auto insurance overall.”

What is clear is that where both traditional and autonomous vehicles are involved, the litigation to determine who is at fault could get far more complicated. That’s where plans like Michigan’s No-Fault Auto Insurance could come in handy. Under Michigan’s policies, it doesn’t matter who is at fault – driver, deer, or autonomous car – a driver turns to his or her own insurance first for medical expenses and lost wages. That will allow injured drivers to continue treatment while the auto manufacturers and insurance companies battle over who actually caused the accident.

Driver-less cars may be closer than we think. In 2013, Michigan passed a law for prototypes to be tested on the open road, and the United Kingdom is prepared to have autonomous vehicles on the road by 2015. The new technology is certain to bring new legal challenges both to drivers and insurers. It will take cutting-edge lawyers to be certain everyone’s needs are met.

David Christensen is a No-Fault Auto Insurance lawyer with Christensen Law in Southfield, Michigan. He and his team are focused on getting their clients’ needs met, even in the most complex car crash claims. If you or someone you know has been injured in an automobile accident, contact Christensen Law today for a free consultation.