Insurance, the bump on our way to robot cars

Self-driving vehicles are safer but also very, very expensive

Having had the sublime pleasure of riding in a robot car a few years ago (and writing about it again recently), it was with great interest that I read the cover story in the latest issue of Wired. The article is all about robot cars – how not just Google, but all auto makers are close to making self-driving vehicles a reality.

The story, which doesn’t appear to be online yet, covered a good number of fascinating angles, from the technology being used to the potential changes we’ll face when robot cars fully arrive. One intriguing possibility is that the entire notion of car ownership may change. If we can simply order up a car on our smartphone that then drives itself to our front door, what need would we have to actually own one?

One of the important things to keep in mind, however, is that robot cars will not actually just show up all of sudden. In fact, they’re already here. As iRobot’s Joe Dyer told me while I was working on Sex, Bombs and Burgers, robotic automation always comes in on “cat’s feet,” or one step at a time. Cars have been slowly inching toward roboticism for decades.

For proof, check out this video of the new Lexus LS 460L, which parallel parks itself. Watching the steering wheel turn itself gives me the same excited willies I got a few years back in Las Vegas:

The Wired story covered the issue of enhanced safety in depth. Robotic cars, after all, have the potential to dramatically cut down on accidents because they are unemotional and thoroughly attentive to their jobs, unlike humans. They simply won’t sell otherwise – think of how disastrous the new self-parking Lexus would be for the company if it ended up with a high incidence of banging up other cars.

So safer cars and fewer accidents should mean lower auto insurance rates, right? Oh yeah, that’s a good one.

For kicks, I decided to get a quote for the new Lexus with a bank insurance supplier. All things being equal, owning this considerably safer car would result in an $900 annual hike over my thoroughly unrobotic 2003 Toyota Corolla (I still have to roll up my windows manually, yeesh).

I called an agent to ask why and got some very unsurprising answers. Insurance rates depend on a number of factors, such as the driver’s history and geographic location. Most importantly, rates can also be affected by the car itself, with some having more expensive parts. It therefore makes sense that the Lexus, which costs upward of a $100,000, might cost more to repair than a Corolla. Similarly, any robotic car will cost more to fix and maintain than what we currently drive.

All told, this is a big problem that will likely be a major obstacle to uptake of robotic cars. All those electronics will not only bump up their sticker price, they’ll also significantly increase the insurance rates. They may be safer, but will the people who need robot cars most be able to afford them? The Wired story’s suggestion that we may not want to own robot cars in the near future may be right on for that very reason.

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