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National Self-Driving Car Legislation Could Speed Product Testing

by Precise Leads

June 15, 2017

Lawmakers in the House and Senate hope to unify a number of state regulations and boost innovation.

Hoping to streamline a hodgepodge of state-by-state laws regulating autonomous vehicles, lawmakers in the House of Representatives and Senate have crafted bills to accelerate the development of driverless cars while also ensuring road safety.

Rep. Greg Walden (R-OR), chairman of the House Energy and Commerce Committee, is leading efforts in the House, while Senators John Thune (R-SD), who chairs the Commerce, Science and Transportation Committee, and Bill Nelson (D-FL), the committee’s ranking member, have teamed up on bipartisan legislation in the Senate. “Self-driving vehicle technology will have a transformational impact on highway safety,” Thune told The Hill. “These principles underscore our commitment to prioritizing safety, fixing outdated rules, and clarifying the role of federal and state governments.”

The proposals aim to rescind current regulations that legislators view as hindrances to driverless car development, such as prohibiting the sale of cars without steering wheels and gas pedals. Under current federal law, automakers must apply for an exemption if they want to test vehicles without those components. But with exemptions maxing out at 2,500 a year, autonomous car manufacturers like Alphabet, Inc.’s Waymo unit say the limit impeded creation of new technologies. Lawmakers responded by permitting the Department of Transportation to raise that number to 100,000, according to a Reuters report.

Regulations Introduced in 33 States

This year, 33 states have introduced laws addressing autonomous vehicles, according to the National Conference of State Legislatures. Last week, Colorado Gov. John Hickenlooper signed a bill into law that requires manufacturers testing driverless cars in the state to first “check in” with the Department of Transportation and the State Patrol, according to a Denver Post article. People sitting in the autonomous vehicles must fasten their seatbelts as well.

California, home to tech haven Silicon Valley, rolled out recommended regulations in March. Among the state’s Department of Motor Vehicles suggested guidelines: Manufacturers must first obtain written approval from a jurisdiction before allowing driverless cars on its roads, as well as a mandate that cars include a remote communication link to transfer control to a human if the vehicle is, for instance, stopped by police.

Under current California law, manufacturers can only test drive cars on state roads, must place a human behind the wheel, and report any incidents when a human overrode the car’s robotic systems. The DMV’s proposals, according to Wired, are meant to regulate driverless vehicles as they travel beyond the testing stage and into widespread commercial use.

The National Highway Traffic Safety Administration issued voluntary rules last fall spelling out a 15-point safety checklist. However, according to The Hill, the Trump administration is currently reviewing those proposals.

The bills now floating in the House and Senate seek to tie together the various state regulations. Lawmakers also hope to promote innovation by giving autonomous car manufacturers a standard set of regulations to follow. In addition, a national law will, the legislators say, educate the public about these vehicles and address other issues, such as cyber security. “The key thing is to make sure we stay in the lead on the innovation and that there aren’t unnecessary roadblocks in the way, balancing that with safety,” Rep. Walden told Reuters.

What This Means for the Insurance Industry

Whatever is enacted in the House, Senate, or individual states, insurers must gear up for the eventuality of driverless cars and the potential liability wrought by a vehicle breakdown or crash. Though autonomous cars may be safer due to the absence of human error, serious crashes have been reported in Arizona and Florida.

Autonomous vehicles blend a high-tech operating system of interconnected sensors, GPS, cameras, and lasers. So rather than assessing risk on human factors (age and gender of the driver), insurers will likely switch underwriting criteria to the car manufacturer’s safety record. If the car’s technology malfunctions or is hacked, liability transfers to the makers of those complex products. And is a car truly driverless if a human in a remote location has the ability to intervene and operate the vehicle?

Before autonomous cars take to the streets in greater numbers, insurers will be in a race to match new underwriting standards to these innovative autos. These vehicles are not only disrupting the car industry, but the insurance business as well.

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