Insurance Academy

Guest Post: Who Is Liable When No One Is Driving? Part 1

By | February 14, 2018

This week (and for the next few weeks) we are grateful for friend of the Academy, Christopher J. Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS, Executive Director, Big “I” Virtual University who provided this blog series about autonomous vehicles.

Opinions vary regarding the widespread availability and ultimate acceptance in the US of fully autonomous vehicles. Some foresee widespread adoption of fully autonomous vehicles within the next “automotive generation” (within 12 years); others believe fully autonomous vehicles won’t be the “rule” for at least two or three automotive generations (24 to 36 years).

Both sides have credible arguments, but only one can be correct.

Technology evolves rapidly. It is reasonable to assume that the technology capable of supporting fully autonomous vehicles will exist long before the full acceptance and use of the technology. Thus, the technology IS likely less than an automotive generation away, yet total public acceptance and full utilization of vehicle autonomy conceivably remains two or three automotive generations away.

What is an “Automotive Generation”?

“Automotive generation” is not an auto industry term; the Virtual University invented this term to describe the technological transition time from one automotive generation to the next. An “automotive generation” is a function of three somewhat unrelated time spans:

  • The estimated automotive technology production platform timing;
  • The average length of car ownership; and
  • The sociologically-developed generational time periods (baby boomers vs. Gen X vs. millennials, etc.)

Automotive Technology Production Platform

This is defined as, “the number of years of incremental technology changes required for the overall technological differences (advancements) between the “base” year model and the most current model to be considered significant.” For instance, I purchased a Volvo XC 90 new in 2006. At the time, it had all the latest available technology. As Volvo made incremental changes to the XC 90’s technology over the next several model years, the car seemed like a technological dinosaur when I passed the vehicle to my daughter in early 2017 (and she told me so – many times).

Volvo’s technological changes were not significant from one model year to the next, but the cumulative effect over time was drastic. The time between initial technology and significantly different technology is the automotive technology production platform.

Because this time period varies by maker and innovation, the automotive technology production platform can range from eight to 10 years.

The Average Length of Car Ownership

Current industry reports state that the average length of new car ownership now stands at 11.5 years. This data comes from a 2015 CNBC report.

Generational Time Periods

Sociologists developed and saddled us with the generational time periods we talk about so frequently. According to sociologists, the baby boom generation lasted 19 years, if you count the base years, (1946-1964). Generation X (my generation) joined the population between 1965 and 1980, covering 16 years (again, counting the base year). Generation Y, or the Millennials, or whatever you want to call them, were born between 1981 and 1995 (15 years). The newest generation on the block (who I hope we don’t hear nearly as much about), Generation Z, began showing their faces in 1995 and probably ended about 2010; another 16-year period.

Based on this, the average generational time period is about 17 years.

Average the three functional time periods and the result falls between 12 and 13 years. For the purposes of this article, this equals one “automotive generation.”

What Must Occur Before Full Autonomy Reigns?

Traditional, human-controlled vehicles will rule the road until two key factors meet: 1) nationwide implementation and improvement of infrastructural technology; and 2) full societal acceptance of driverless technology.

Infrastructure Technology

As best I understand driverless technology, autonomous vehicles need data. Data from other cars, data from the surroundings, data about the conditions, lots and lots of data. Part of this data must come from the infrastructure itself. Even if cars are equipped to be and are able to operate autonomously, the infrastructure must be able to “help” the vehicle accomplish its mission. If the infrastructure is lacking, the vehicle won’t perform as intended.

Is every city, town, village or whatever equipped with the necessary technology? How long will it take to equip them? The amount of time required to equip the municipalities is not just a function of the availability of the technology, it is also a function of money.

Societal Acceptance

Those of us who grew up watching Knight Rider dreamed of owning a car like KITT (which stood for Knight Industries Two Thousand); one that could come when we called it and drive for us when we wanted to do something else (like sleep or read). Of course, some of us also wanted a car that was bullet proof and shot flames from a flame thrower hidden in the back – but I digress.

But the reality is, most of us would feel more than skittish turning over full control of our car – to the car. Human nature generally won’t allow such a drastic departure from tradition; this is one reason auto manufactures make incremental technological changes (back to the concept of an automotive generation).

Recently I test drove a new vehicle equipped with auto-stop technology. As I was driving the salesman said, “You’ve got to trust me on this. Set your speed and auto stop; take your foot off the gas and resist the temptation to hit the brake.”

As we cruised along at nearly 60 miles per hour, we approached a line of stopped traffic. Of course, I wanted to use the brake and stop the car. The salesman said, “don’t do anything.”

Guess what, the car stopped on its own. I never touched the brake. That’s just one step towards a fully autonomous technology, but it’s one we humans are willing to accept – right now. What’s next?

Several more incremental steps must be taken before we humans are willing to give up control of our vehicle. That takes time. How much? The answer depends on the factors defined by the “automotive generation” concept. As a Gen X’er, I want to drive; in fact, I want a Mustang again and really drive; I’m not going to give up that joy. Gen Z (my kid’s generation) or the next generation (whatever they are called) may not care about the driving experience; they may not even want to drive.

Fully autonomous vehicles will not dominate the roadways until infrastructural technology and social acceptance (or desire) converge.

Next week: How do we get there from here…

Christopher J. Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS, is Independent Insurance Agents and Brokers of America (IIABA or the Big “I”) Virtual University executive director. He joined the Big “I” team in November 2016. His current duties involve researching, writing, and teaching property and casualty insurance coverages and concepts to Big “I” members and others in the insurance industry.

About Christopher J. Boggs

Christopher J. Boggs joined the insurance industry in 1990. He is currently the Executive Director, Big I Virtual University and former Vice President of Education for Insurance Journal's Academy of Insurance. More from Christopher J. Boggs