In addition, self-driving cars could reduce emissions (Worland, 2016). Transportation produces nearly thirty percent of overall U.S. global warming emissions (DeCicco and Fung, 2006). However, with driverless cars, this problem can be solved. As the technology of driverless cars would allow communicating with roadside infrastructures like traffic lights, stalled vehicles, and road sign post, and then use this data to control its fuel consumption and emissions effectively.

Risks of Self-Driving Cars

 Auto insurance premiums could be reduced if insurers are containing the potential decreases in related auto risks. Forbes (2013) estimates that premiums will able to reduce by 75 percent if lesser claims or lower accidents. In addition, insurers will need to evaluate the severity of such collisions to assess any reduced frequency of vehicle crashes. Besides, the higher severity of property damage may increase the costs of repairing and replacing the damaged parts.

In view of the advanced safety features installed in the driverless cars which have not been fully certified of faultless, insurers may have difficulty in determining the allocation of liability pool in traditional or driverless auto segments. In the occasion of an accident involved by the driverless vehicles, who would be liable? Car owner or manufacturer? Perhaps, insurance will take on a no-fault form, in which neither party is at fault, and each car owner’s insurance covers their own vehicle. Or insurance could become similar to utility cost with a premium cost based on mileage or usage (Chan and Waddingham, n.d.).

Additionally, another potential risk exposure is cyber risk and hacking of the host systems (Krome, 2016). Driverless cars are relying on internet connectivity which may be resulting in an unavoidable risk of disruption. Nuisance attacks like ‘spam jams’ and hacker created road congestion, causing changed destinations or blocked up roads remotely, Furthermore, autonomous cars would be a perfect target for criminals whereby he could drive away any car they like.
 

Moreover, the FBI recently pointed out that driverless cars could post a threat as terrorists could gain control of vehicles effortlessly for criminal attacks.

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 Written by: Loke Jia Wen  

References:
 

Chan, C., & Waddingham, B. Driverless Cars: How will insurers be affected? Actuarialpost.co.uk. Retrieved 7 June 2017, from http://www.actuarialpost.co.uk/article/driverless-cars:-how-will-insurers-be-affected-6725.htm

DeCicco, J., & Fung, F. (2006). Global Warming on the Road. Environmental Defense. Retrieved 7 June 2017, from https://www.edf.org/sites/default/files/5301_Globalwarmingontheroad_0.pdf

Forbes. (2013). Forbes Welcome. Forbes.com. Retrieved 7 June 2017, from https://www.forbes.com/sites/chunkamui/2013/03/28/will-auto-insurers-survive-their-collision-with-driverless-cars-part-6/#2c0ec1e97b38

Greenblatt, J., & Saxena, S. (2015). Autonomous taxis could greatly reduce greenhouse-gas emissions of US light-duty vehicles. Nature Climate Change. Retrieved 7 June 2017, from http://orfe.princeton.edu/~alaink/SmartDrivingCars/PDFs/aTaxi_GHG_Emissions_Greenblatt.pdf

Krome, C. (2016). Self-driving cars and cybersecurity: What are the risks of car hacking? BetaNews. Retrieved 7 June 2017, from https://betanews.com/2016/06/09/self-driving-cars-and-cybersecurity-what-are-the-risks-of-car-hacking/

LaFrance, A. (2015). Driverless Cars Could Save Tens of Millions of Lives This Century. The Atlantic. Retrieved 7 June 2017, from https://www.theatlantic.com/technology/archive/2015/09/self-driving-cars-could-save-300000-lives-per-decade-in-america/407956/

Pyper, J. (2014). Self-Driving Cars Could Cut Greenhouse Gas Pollution. Scientific American. Retrieved 7 June 2017, from https://www.scientificamerican.com/article/self-driving-cars-could-cut-greenhouse-gas-pollution/

Worland, J. (2016). Self-Driving Cars Could Help Save the Environment—Or Ruin It. It Depends on Us. Time.com. Retrieved 7 June 2017, from http://time.com/4476614/self-driving-cars-environment/