As driverless cars, or Autonomous Vehicles (“AVs”) get closer to becoming a reality on our highways and city streets, questions arise about the ethical programming of these cars. Specifically, how will an AV be programmed to respond in a situation in which it knows an accident is unavoidable?

Will driverless cars be programmed to protect the driver under any and all circumstances and minimize damage or harm to the vehicle and its passengers? Or will it be required to include the welfare of the other cars, pedestrians, property and even pets it senses are in harm’s way as a result of the impending, unavoidable accident? The question is a thorny one when at first, the roads are populated with both human driven cars as well as Autonomous Vehicles. But it will very quickly become academic. Once the entire road system is replete with AVs, they can all be programmed to fend for themselves and/or even communicate with one another to eliminate accidents. But to get there, the public must gain confidence in AVs and truly believe they are fail-safe. Besides, will my insurance cover me if the computer freezes or goes haywire?

In a well crafted bid to instill public confidence in Autonomous Vehicles, and cut through the patchwork of regulation that is different across various states in the USA, Google (arguably the leader in Autonomous Vehicles) and Volvo (another leader in the field) recently announced their intention to accept the liability for any accident that is the result of a flaw in the design of the AV or one of its components.

One could easily surmise that Google’s move to insure its own vehicles is a mere marketing gimmick designed to quickly instill public confidence in its AV creations. But it is more likely something much, much bigger than that…

This is a very significant development, and is effectively Google providing auto insurance for their AVs. Moreover, it has the potential to expand beyond just the designer offering to provide liability cover to a situation where they could require every AV sold to be insured by its designer – ie: Google. If so, this could become an extremely valuable new business. Google has already demonstrated that its AVs on the road have a far lower accident record than humans – zero, in fact when the fault of the 11 accidents is factored in as entirely on the other (human) driver.

By those statistics, the AVs will be the best vehicles on the road to insure – the lowest accident rates, zero driver error and a completely auditable log of every event, timeline and sensor on the car. And with that deceptively altruistic commitment, the P&C insurance companies will have lost one of the largest segments of their business. Google, in fact, has already indicated its desire to enter the car insurance business. And once we are getting our AV car insurance from Google, how long will it be before we are getting house, health, disability and life insurance from the same source?

One could easily surmise that Google’s move to insure its own vehicles is a mere marketing gimmick designed to quickly instill public confidence in its AV creations. But it is more likely something much, much bigger than that. Google’s willingness to accept full liability for accidents involving its driverless cars is, in fact, a Trojan Horse into the multi-trillion dollar insurance industry, Berkshire Hathaway, Allianz, and AIG be warned.

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