Blog

Self-driving cars used to be the stuff of sci-fi movies, but here we are—on the edge of a future where cars do the driving, and humans just sit back and enjoy the ride. Sounds great, right? Well, not so fast. When it comes to auto insurance, autonomous vehicles (AVs) bring a mix of excitement and headaches. Some things might get better, but some might get downright complicated.

The Good: Fewer Accidents, Lower Premiums?

Let’s start with the upside. The biggest promise of autonomous vehicles is fewer accidents. Human error causes about 94% of car crashes in the U.S., according to the National Highway Traffic Safety Administration (NHTSA). If AI takes the wheel, we could see a major drop in fender benders and serious wrecks. Fewer accidents mean fewer claims, and that could bring down insurance premiums over time.

For instance, Tesla’s Autopilot and Full Self-Driving (FSD) features already show signs of reducing crash rates. A study by Tesla claimed that cars using Autopilot were involved in accidents at a rate of one per 4.31 million miles driven, compared to one per 1.79 million miles for regular drivers. If more cars on the road drive themselves, insurance costs could shrink since there’d be fewer payouts for totaled vehicles and medical bills.

The Bad: Who’s at Fault?

Now, here’s where things get messy. If an autonomous car crashes, who’s to blame?

Normally, insurance companies deal with drivers, but what happens when the “driver” is a computer? Some insurers think liability will shift from individual drivers to manufacturers and software developers. But proving that a system glitch, not human interference, caused a crash could lead to long and expensive legal battles.

We’ve already seen glimpses of this problem. In 2018, an Uber self-driving test vehicle struck and killed a pedestrian in Arizona. Investigators found that the car’s software didn’t properly identify the person crossing the road. Uber dodged criminal charges, but cases like this raise tough questions about liability. If AVs become widespread, expect a wave of lawsuits and policy changes as insurers and automakers figure out who foots the bill when something goes wrong.

What Happens to Insurance Companies?

Right now, traditional auto insurance is built around personal liability. You hit someone? You (or your insurance company) pay for the damage. But if automakers become responsible for crashes, will people even need personal car insurance? Some experts think insurance could shift toward product liability coverage, where manufacturers take on most of the risk. That might mean higher prices for cars but lower premiums for individuals.

On the other hand, even if AVs cut down on accidents, they’re still expensive to repair. A simple bumper replacement in a high-tech self-driving car isn’t like fixing a dented Honda Civic—it could cost thousands due to all the sensors and cameras involved. So, while you might crash less, fixing the car when you do could still leave a dent in your wallet.

Looking Ahead

Autonomous vehicles are rolling forward, whether we like it or not.

In some ways, they could make driving safer and cheaper, but they also bring big questions about responsibility, insurance pricing, and legal battles. Insurers, automakers, and lawmakers still have a lot to figure out before AVs fully take over the roads.

If you’re thinking about getting a self-driving car, pay attention to how insurance rules change. Right now, there’s still a lot to figure out—like who’s responsible in an accident and how policies will work. But one thing’s for sure: the industry is on the cusp of significant transformation.