Self-Driving Cars and Your Insurance

A small but growing number of vehicles on U.S. roads can operate without human control in defined conditions, which is challenging long-standing assumptions in auto insurance about who is responsible when a crash occurs.

This creates a dilemma since insurance pricing, claims handling and medical bill payments after an accident are all built around fault. As more vehicles take over the driving task themselves, insurers, regulators and courts are being forced to decide whether responsibility belongs with the person in the car or the company that designed the system.

 

Self-driving vehicles still uncommon

True self-driving vehicles — those capable of operating without human supervision — remain limited in number.

Privately owned vehicles with true self-driving capability are still rare, but some manufacturers are pushing in that direction. Tesla continues to market its Full Self-Driving system as it works toward higher levels of autonomy, but the reality is that many Tesla drivers use this mode regularly and often in conditions they shouldn’t.

Commercial robotaxi fleets operated by companies such as Waymo are operating in cities including Phoenix, San Francisco, Los Angeles and Austin. Industry estimates suggest that more than 1,500 fully autonomous vehicles are currently in commercial service in the U.S.

 

Crashes and fault in self-driving mode

Self-driving systems have already been involved in real-world crashes, and those incidents illustrate why insurance questions are so complex.

Federal safety regulators have reviewed hundreds of crashes involving automated driving systems. In many cases, investigators found that the autonomous vehicle was struck by another driver or that the human occupant misused the system. In a smaller number of cases, system limitations like failing to identify a pedestrian or hazard caused an accident.

From an insurance standpoint, the key issue is control. When a vehicle is truly operating itself — not waiting for human intervention — fault may shift away from the occupant and toward the vehicle manufacturer or software developer. Currently, if a motorist is using self-driving mode and is found at fault in an accident, insurers would still handle the claim as normal. However, if the insurer’s investigation finds that the self-driving system caused the accident, they may come after the manufacturer to recoup any payout they make.

Self-driving cars generate detailed records showing speed, braking, steering inputs and system status before and during a crash. That data has become central to determining whether the vehicle or a human occupant was responsible.

Some manufacturers have moved directly into insurance. Tesla, for example, offers its own coverage in several states and uses real-time driving data to price premiums. Drivers who allow the company to monitor behavior may qualify for lower rates, while riskier patterns can push costs higher.

 

Why rates may eventually fall

Self-driving technology holds long-term promise for insurance. Since human error is a major contributor to crashes, removing it from the equation could significantly reduce the frequency of accidents over time. Fewer crashes would ultimately mean fewer claims.

In the near term, however, savings are not guaranteed. Self-driving vehicles are expensive to repair due to sensors, cameras and specialized software that must be recalibrated after even minor accidents.

 

What this means for consumers

Consumers should not expect immediate insurance discounts simply because a vehicle can drive itself. 

Instead, expect closer scrutiny after accidents, heavier reliance on vehicle data and evolving policy language that clarifies responsibility when software is in control.

For now, insurance companies and courts are still deciding cases on which driver is at fault. Eventually, when most cars on the road are fully self-driving, things may change, but that’s not happening in the near future.