What to know about self-driving car insurance

Fully-autonomous cars don’t exist yet, but car insurance will be affected as driverless car technology develops.

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Andrew HurstSenior Editor & Licensed Auto Insurance ExpertAndrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

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While the technology for self-driving, fully-autonomous cars continues to improve and these vehicles eventually become common on the country’s roads, the insurance industry will change. One part of auto insurance that will change because of driverless cars is the cost of coverage.

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As driverless technology gets better and human driving becomes less common, accidents will decrease — as will claims. Fewer claims will lead to cheaper costs for insurance companies and, as a result, lower premiums for auto insurance coverage.

How will self driving cars affect insurance?

Self-driving cars will likely affect the way insurance premiums are calculated and how much car insurance costs for many people. Usually, car insurance companies determine your rates by using personal details, like where you live, your age, and your driving record, to estimate how likely you are to make a future claim.

But in a world where self-driving cars reduce the chances that anyone is involved in an accident, the cost of insurance for drivers who are now considered the most likely to be in a crash would fall. For example, if young people no longer made claims at a higher rate than older drivers, then why would their rates be significantly higher?

In this scenario, self-driving cars would cause insurance companies to have to rethink the best way to predict a driver’s insurance risk.

Driverless cars might also change auto insurance by creating more discounts for those car owners who regularly use their vehicle’s autonomous features. This has already started to happen with GM, Tesla, and Rivian. These companies offer their own insurance that rewards drivers with discounts for using hands-free tech correctly and driving safely.

Is insurance cheaper for self-driving cars?

Although self-driving insurance is still in its early stages, there are some perks to having a vehicle that’s equipped with driverless technology. The level of sophistication of cars’ self-driving technology varies by brand, but a vehicle with any safety features can cause insurance to be slightly cheaper.

Right now, autonomous technology most likely includes driver-assistance features like lane-departure warnings, collision avoidance, blindside detection, automatic parking, and automatic lights. 

Insurance can sometimes be cheaper for cars with these self-driving features than premiums for other similar newer vehicles, but the cost to repair or replace this technology if the car was damaged can also keep rates higher than for a car without any self-driving features.

Which companies have self-driving car insurance benefits now?

Some car makers that make vehicles with self-driving features already offer insurance benefits. Companies like General Motors (through its OnStar Insurance), Tesla, and Rivian all offer their own insurance. Drivers who have one of these manufacturer’s car insurance can get lower rates for coverage based on how they drive and whether they use self-driving features.

For example, Tesla’s insurance rates are determined by each driver’s Safety Score. Your car uses driverless features, like whether you correctly use the car’s Autopilot features or have avoided collision warnings, to calculate your Safety Score. According to Tesla, most drivers who have a high Safety Score can save 20% to 40% on a policy.

Similarly, Rivian’s own version of self-driving insurance encourages drivers to use the carmaker’s autonomous driving assistance program, Highway Assist. If you use Highway Assist often, Rivian claims you could save up to 15% on your insurance.

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The future of self-driving car insurance

The possibilities of fully-autonomous vehicles have left some people wondering whether they should have to pay for insurance at all in a future where few people would drive their own cars. But research suggests that insurance would still play a useful role in a driverless world.

A study by the RAND Corporation on the future of self-driving auto insurance concluded that car manufacturers’ liability is likely to increase as self-driving cars become the norm. RAND also proposed that drivers could increase their coverage with no-fault insurance, in order to recover the damages to their own cars if they were involved in a crash.