STANFORD, Calif. -- Imagine being able to safely navigate through crowded city streets with the ease of a drive in the country. With self-driving cars looking more and more like a reality, the stressful, white-knuckled commute may someday be a thing of the past.

Chris Urmson is the director of Google’s self-driving car project. He said what many consider a peek into the future is happening today with the development of these high-tech automobiles. “We are moving forward at a remarkable pace,” he said.

The software powering Google's cars is called Google Chauffeur. “Fully autonomous driving has always been the goal of our project,” Urmson said. “We think this could improve road safety and help lots of people who can't drive.”

Google is developing prototypes of vehicles that have been designed to drive themselves. Urmson said “Just push a button and they'll take you where you want to go. We'll use these vehicles to test our software and learn what it will really take to bring this technology into the world.”

For a car to be truly self-driving, it must be able to avoid accidents at rates equal to or greater than human-operated vehicles without any input from the driver.

Google's fleet has shown considerable promise so far, logging over 700,000 combined miles and only being involved in two accidents. The first one involved a Google car that was hit at a stoplight by a human-operated car and the second occured in a parking lot when the Google car was being driven by a human.

But if the record persists, these self-driving cars are poised to beat the average driver in terms of safety. While many car buyers may ignore the crash data and insist they can drive better, insurance companies may not be so quick to trust the competence of human drivers. Insurance companies seek out statistics to set rates and balance risk.

Realizing that there have been roughly 30,000 fatal crashes annually in the U.S. since 2009,carriers are not likely to adopt a "human driver know best" attitude toward car insurance.

That, in turn, could encourage adoption of these cars. Since financial costs are typically a major factor in selecting a car, lower insurance premiums could balance out the higher up-front cost of a self-driving car, perhaps even making it cheaper over time than a human-operated vehicle.

Google is a leader in self-driving technology with its very own, built-from-scratch-in-Detroit self-driving car. The battery-powered electric vehicle has as a stop-go button, but no steering wheel or pedals. The plan is to build around 200 of the mostly-plastic cars over the next year, with road testing probably restricted to California for the next year or two.

The Motley Fool staff writer Alexander MacLennan, wrote that one obstacle to self-driving car sales may be perception and not the reality. If and when self-driving cars can be put into production, it's definitely worth considering how insurance companies could be the unlikely saviors of this new technology.           

According to MacLennan, insurance companies already set rates based on factors such as age, gender, and driving history, so creating a rate model for self-driving cars would not be much of a stretch.

If self-driving cars continue to outperform their human-driven counterparts in terms of safety, it would not be surprising for owners of these vehicles to see significantly lower insurance premiums.

Self-driving cars still carry a high degree of skepticism from people who have witnessed computer crashes and other technological issues. However, these vehicles have the potential to outperform virtually all human drivers thanks to the faster responses and greater "awareness" of surroundings, not to mention the elimination of many dangerous driving behaviors.

While self-driving cars will undoubtedly be more expensive up front due to the extra equipment involved, insurance companies could play a role in speeding up the adoption process.

 It will still be several years before self-driving cars are on the roads in large numbers, but the technology has the potential to save thousands of lives annually. If insurance companies recognize the increased safety of these vehicles (provided this conclusion remains valid as Google continues testing), lower insurance premiums may tip the balance in favor of self-driving cars.

Nevada, Florida, California, and Michigan have passed laws permitting autonomous cars.

On March 28, 2012, Google posted a YouTube video showing Steve Mahan, a Morgan Hill California resident, being taken on a ride in its self-driving Toyota Prius. In the video, Mahan states "Ninety-five percent of my vision is gone, I'm well past legally blind".

In the description of the YouTube video, it is noted that the carefully programmed route takes him from his home to a drive-through restaurant, then to the dry cleaning shop and finally back home.

Watch a Google YouTube video here:

Posted 2:44 PM

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