If something happens within the car, it can be detected by sensors. It's the same as with building and programming machines and robots. If you put enough sensors into a device, you can detect everything, down to the functioning of single valves.
Even things like a crash can be detected; if you suddenly see an object that doesn't move, while you get closer and closer, the car needs to break. A computer can determine this in a fraction of a second.
"I see stuff...."
"I'm closing in..." (maybe the object is just going slower than I am)
Repeat a few times. If still closing in after 3 or 5 cycles, break. Those 3-5 cycles take fractions of seconds.
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