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 more than 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 autopilot features, such as those Tesla offers. 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, Tesla drivers are required to touch the steering wheel after a certain amount of time if they want to keep the car in autopilot mode. And state minimum car insurance requirements apply to cars with autopilot features just as they do to cars without.

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

Typically, no. The higher cost of self-driving vehicles, in fact, can result in higher premiums for owners due to the potential for greater loss. Many self-driving vehicles require specialists to make repairs, which means the standard automotive repair shop can't 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).

Currently, vehicles that utilize automation features like Tesla's Autopilot are classified as Level 3: Conditional Driving Automation. Something like the cruise control feature found on most vehicles is considered Level 1 Automation, or Driver Assistance.

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.

Many experts agree that Level 5: Full Driving Automation vehicles are at least a decade or more from being widely available. Even then, current laws must change, and new legislation must be enacted before this kind of fully autonomous vehicle will be legally permitted on highways.