Insurance for self-driving cars

How will autonomous cars affect insurance?

It's still very early to predict how driverless cars may ultimately impact the car insurance industry. However, the hope is that, among other benefits, autonomous vehicles will reduce the significant number of crashes currently caused by distracted driving. More than 3,100 people were killed and around 424,000 injured due to distracted driving in 2019 alone, according to the CDC. Driverless cars may be able to react more quickly to input than the human brain. Manufacturers and researchers hope the safety features implemented in these vehicles will reduce crashes and, therefore, human life lost in accidents.

For now, though, you're more likely to purchase a vehicle with driver assistance features, such as those Tesla and GM offer. These features allow the vehicle to maintain its position in a lane and make slight adjustments when turning, but there are restrictions on how much the vehicle can do without human intervention. For example, drivers may be required to touch the steering wheel after a certain amount of time if they want to keep the feature turned on. And state minimum car insurance requirements apply to cars with driver assist features just as they do to cars without.

Does a self-driving car result in lower insurance rates?

Likely, no. In fact, the higher cost of vehicles with driver assistance features may result in more expensive insurance due to the potential for greater loss. Technologically advanced vehicles require specialists to make repairs, which means the standard automotive repair shop may not be able to service your car. Learn more about the factors that can affect auto insurance rates.

How is a self-driving car defined?

According to the Society of Automotive Engineers, there are six levels of self-driving vehicle technology, ranging from Level 0 (no automation) to Level 5 (full automation).

Vehicles that utilize automation features like Tesla's Autopilot or GM's Super Cruise require driver supervision and are classified as Level 2: Partial Driving Automation. The cruise control feature found on most vehicles is considered Level 1 Automation: Driver Assistance.

Mercedes-Benz was recently first to meet the requirements for Level 3: Conditional Automation. Its Drive Pilot system's automated driving features can drive the vehicle under limited conditions, and a human driver must be ready to drive when the feature requests. However, Drive Pilot is only approved in Nevada as of 2023.

There are currently no fully automated vehicles available for consumer purchase. Some countries, such as Sweden, have launched pilot programs with fully automated freight vehicles, but even there the vehicles are still rare. Perhaps the most famous example of a fully autonomous vehicle is the Google Street View car. However, all of these autonomous vehicles are owned by large companies and often still utilize a human driver for emergencies.

Autonomous vehicle industry experts vary on when Level 5 Full Driver Automation will be widely available. As of 2023, Google's driverless taxi service Waymo, considered Level 4: High Driving Automation, is available in Phoenix and is testing in other cities. GM's robotaxi, called Cruise, is also considered Level 4 and is available in San Francisco as testing begins in other cities. But before fully autonomous vehicles will be legally permitted on the roads, current laws must change, and new legislation must be enacted, which could take years.