While the mention of autonomous vehicles — cars that drive with or without a driver — may invoke images of futuristic vehicles from a sci-fi movie, the reality of fully self-driving cars isn’t too far away. 

As more vehicles begin offering driver assistance technology, aiming to decrease accidents and limit injuries, it’s fair to wonder how advances in safety technology impact road safety and auto insurance. According to the National Highway Traffic Safety Administration (NHTSA), safety automation is one of the biggest pros of self-driving cars. 

Learn more about self-driving cars – including the costs, benefits and risks of autonomous vehicle insurance.

Key Highlights
  • Autonomous cars aim to create safer roads, efficient traffic flow and fewer accidents and fatalities.
  • Insurance companies will likely need to revise and restructure many of their policies and risk factors for self-driving insurance when autonomous cars are released.
  • While liability insurance would be required for self-driving cars, with fewer accidents and driver responsibility, insurance rates would decrease and manufacturer responsibility would increase. 

What are self-driving cars?

Imagine commuting to work and reviewing a business brief for your morning meeting from behind the wheel. Glancing up as your vehicle slows, you notice an accident ahead, but your vehicle is already veering left to change its route. In the future of self-driving cars and trucks — those that drive independently, with or without driver interaction ­­— this scenario could be a possibility.

While fully automated self-driving cars are still being tested and unavailable for consumer purchase, several manufacturers have launched vehicles with highway pilot features, where the vehicle can steer, accelerate and brake when activated. Some vehicle options include automated features and crash avoidance technology, such as blind-spot monitoring, forward-collision warnings, parking assistance and lane-departure warnings. 

According to the NHTSA, there are six levels of self-driving car technology, ranging from Momentary Driver Assistance at Level Zero to Full Automation at Level Five. Some current vehicles offer Level Two — Additional Assistance because there is highway autopilot, but drivers must still operate the vehicle and be present behind the wheel.  

These technological advances have one main goal: to decrease human error and the thousands of fatalities on the road every year. In 2019, more than 3,100 people died and 424,000 were injured in crashes involving distracted drivers, according to the Centers for Disease Control and Prevention. So, if this safety goal is achieved, what does that mean for the future of self-driving cars and the insurance industry?

How autonomous vehicles impact insurance

Most car insurance companies today determine your premium based on factors such as age, state, driving and credit records and vehicle make and model. They also assess your risk level when compiling your car insurance quote. While autonomous insurance is a product of the future, CarInsurance.com can speculate on how self-driving cars will affect insurance based on current liability, collision and comprehensive car insurance.

With that in mind, some aspects of coverage will change with driverless cars and insurance, and drivers will still likely need liability coverage as new vehicles are rolled out to the public. Currently, drivers of vehicles with autopilot features still must adhere to their state’s required minimum liability limits. Tesla uses its technology to track driver behavior in real-time and then sets car insurance premiums based on the compiled data.

In the future, their manufacturers may have to take at-fault responsibility for crashes and injuries their vehicles cause on the road. Comprehensive coverage may also decrease because of higher repair costs for self-driving vehicle damages, fewer auto accidents and increased health insurance coverage.

Costs to consider with autonomous vehicles

There are some costs to consider when considering if a self-driving car is in your future. First, compare the average new car cost to a Tesla with an autopilot system.

In the United States, a new car costs, on average, $48,481, according to Kelly Blue Book 2022 data — a record high and $2,250 higher than a year ago. The 2023 Tesla Model 3, the company’s most affordable option, starts at $42,990. When adding the autopilot feature, you’re looking at an additional $1,188-$2,400 annual subscription.

While the costs are comparable, the annual autopilot feature adds up over time. Insurance rates for Tesla vehicles often run high, ranging from $2,000-$3,000 annually for full coverage with a good credit rating. Conversely, insurance companies offer full coverage insurance for less than $100 monthly or $1,200 annually, on average, for gas-powered vehicles – but this figure depends on a car’s make & model and other factors.  

It’s hard to predict what insurance for autonomous vehicles will cost in the future, but initially, it’s likely to cost more despite the vehicles’ increased safety technology. However, number crunching isn’t the only thing to consider when comparing the benefits and risks of self-driving cars.

Check out our detailed guide on Tesla car insurance

Pros and cons of self-driving cars

Self-driving cars should offer drivers convenience, safer roads and insurance deductions. Until these futuristic cars hit the road, it’s hard to know if these predictions will occur or if the fears about increased accidents and technology glitches will become the next highway headache. There are some clear pros and cons of autonomous vehicles to highlight — regardless of what year we’re looking at in the future.


  • Reduction of auto accidents, injuries and fatalities
  • Projected reduction in insurance costs
  • Additional safety features
  • Driver convenience — commuting, traveling and time
  • Streamlined commuter travel
  • Potential environment improvements
  • Reduced driver risks for teens, elderly and disabled


  • Higher estimated initial purchase cost
  • Consumer fear and reduced interest
  • Public transportation and its economy may need to be redefined and restructured
  • Increased manufacturer versus driver at-fault insurance investigations
  • Muted driving enjoyment
  • Faulty technology

Frequently Asked Questions (FAQs): Auto insurance for self-driving cars

What is the future of self-driving cars?

​​Autonomous vehicles are a dream set to become a reality — if auto manufacturers can fine-tune the technology and situational reactions. However, it likely will take years to perfect fully automated self-driving cars, estimated between 10 to 30 years, according to a 2021 article by the New York Times. Companies such as Woven and Waymo have been testing fully autonomous taxi services in the suburbs of Phoenix.

However, there have been some fatalities; for example, Tesla’s highway autopilot feature and Waymo’s driverless pedestrian accident in Arizona. Until absolute safety is proven consistent with the emerging technology, manufacturers will continue to build off the Level Two — Additional Assistance automation we see in vehicles on roads and highways. 

As self-driving car technology advances and increases, insurance companies must review their liability policies. Specifically, shifting the responsibility to manufacturers. This opens potential increases in at-fault accident investigations between the car, driver, manufacturers and insurance companies.

Why do we need autonomous vehicles?

Autonomous vehicles aim to decrease road and highway accidents and fatalities, especially regarding driver error and distracted behaviors behind the wheel. Other perks include offering drivers more convenience during their commute and creating more time in their day, less pollution and improved traffic flow. Advancements in this technology can also lead to infrastructure improvements and open the door to other transportation benefits.

How will self-driving cars change the insurance industry?

With safer roads, fewer accidents and reliable vehicles, the insurance company would likely need to redefine most of its policies, qualifying factors and clauses. There would be less driver risk but more technology risk concerns. Undoubtedly, there would still be minimum liability requirements; however, those would need to be redefined, and manufacturers would have an increase in accident coverage. 

Teen drivers and individuals needing specialized coverage, such as DUI insurance and SR-22 insurance, would still likely be covered, similar to current-day standards, until driverless vehicles are the only vehicles on the road.

Resources & Methodology 

  1. Centers for Disease Control and Prevention (CDC). “Transportation safety: Distracted driving.” Accessed April 2023. 
  2. Insurance Information Institute (III). “Background on: Self-driving cars and insurance.” Accessed April 2023.
  3. Kelly Blue Book (KBB). “Average new car price sets record.” Accessed April 2023. 
  4. Kelly Blue Book (KBB). “Tesla Model 3.” Access April 2023.
  5. National Highway Traffic Safety Administration (NHTSA). “Automated vehicles for safety.” Accessed April 2023.
  6. National Highway Traffic Safety Administration (NHTSA). “Driver assistance technology.” Accessed April 2023.
  7. New York Times. “The costly pursuit of self-driving cars continues on. And on. And on.” Accessed April 2023.
  8. RAND. “Autonomous vehicle technology.” Accessed April 2023.
  9. Tesla. “Insurance: Rewarding safe driving.” Accessed April 2023.
Laura Longero

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Laura Longero

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Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.

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John McCormick

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John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.

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