Self-driving cars are no longer a futuristic dream. They are here, reshaping how we think about transportation and, more importantly, insurance. But with new technology comes new challenges. How do we determine liability when a self-driving car crashes? What risks should insurers be focusing on? How will policies change in the coming years?
1. 94% of traffic accidents are caused by human error
Human error has always been the leading cause of crashes. This includes distracted driving, speeding, fatigue, and impaired driving. Autonomous vehicles promise to eliminate many of these risks by using sensors, cameras, and AI to make better driving decisions.
For insurance companies, this means a potential shift in the way policies are written. As AVs become more reliable, personal driver liability may decrease, while vehicle manufacturers and software providers take on more responsibility.
What to do:
If you’re in the insurance industry, start preparing for policies that focus more on product liability and less on individual driver errors. If you’re a consumer, expect lower premiums over time—but also new types of coverage you’ll need to consider.
2. Autonomous vehicles could reduce crashes by up to 90%
Fewer accidents mean fewer insurance claims, which is great for drivers but challenging for insurance companies that rely on premiums. However, while the number of crashes may drop, the cost of each accident could rise due to expensive repairs.
What to do:
Insurers should shift toward policies that focus on repair costs, cybersecurity risks, and liability protection for software malfunctions. For drivers, this means researching AV insurance policies that cover high-tech components.
3. Level 4 and Level 5 AVs are expected to lower accident rates by 50% by 2035
Level 4 and Level 5 AVs require little to no human intervention, which is expected to significantly reduce accident rates. However, it will take time before these vehicles are widely adopted.
What to do:
Car manufacturers should work closely with insurers to develop policies that reflect this changing risk landscape. Insurers should also educate consumers about the benefits of AVs in reducing accidents and potentially lowering insurance costs.
4. Tesla’s Autopilot system reduces crash rates by 40%
Tesla’s data shows that self-driving technology is already making a difference. Autopilot helps avoid collisions through automatic braking, lane-keeping assistance, and adaptive cruise control.
What to do:
If you own a vehicle with autonomous features, ensure your insurance policy reflects these safety benefits. Insurers should offer discounts for AVs that have a proven track record of reducing accidents.
5. Liability for AV crashes is shifting from drivers to manufacturers and software providers
As AV technology takes over driving responsibilities, the question of who is at fault in an accident becomes more complicated. Traditionally, drivers were responsible, but with AVs, liability could fall on automakers, software developers, or even third-party suppliers.
What to do:
Legal frameworks must evolve to address these complexities. Insurers need to collaborate with lawmakers to create policies that fairly distribute liability among different stakeholders.
6. Cybersecurity risks for AVs are rising, with over 500,000 attempted cyberattacks on connected vehicles reported in 2022
Connected vehicles are a hacker’s dream target. Cyberattacks could lead to stolen data, system malfunctions, or even remote hijacking of a vehicle.
What to do:
Car manufacturers and insurers should focus on cybersecurity insurance policies. Consumers should invest in vehicles with strong cybersecurity protections and consider adding cyber liability coverage.
7. 42% of auto insurance executives expect traditional policies to be obsolete by 2040 due to AV adoption
As autonomous technology advances, traditional auto insurance policies that focus on driver behavior may no longer be relevant.
What to do:
Insurance companies should start transitioning toward policies based on vehicle software, sensor reliability, and manufacturer responsibility.
8. By 2030, autonomous vehicle insurance premiums could drop by 30-50%
Fewer accidents mean lower payouts, allowing insurers to reduce premiums. However, this also means a shift in the insurance industry’s revenue model.
What to do:
Insurance companies should explore new revenue streams, such as cybersecurity coverage, fleet-based policies, and maintenance protection for AVs.
9. 42% of Americans express concerns about liability issues in AV crashes
Many people are unsure about who will be responsible if an autonomous car causes an accident. These concerns need to be addressed through clear legal and insurance policies.
What to do:
Consumers should stay informed about how insurance laws are changing. Insurers and automakers should work together to clarify liability concerns through public awareness campaigns.
10. Insurers predict a 60% drop in personal auto insurance revenues with widespread AV adoption
As accidents decrease, insurance companies will collect fewer premiums, which could lead to higher rates for niche coverage types like cyber liability and AV component protection.
What to do:
Insurers should diversify their product offerings and focus on AV-specific coverage, such as software failures and liability for automated decision-making.
11. Fleet-based insurance models are expected to grow by 200% due to commercial AV deployments
Autonomous rideshare services and delivery fleets are expanding rapidly. Instead of individual policies, insurers will need to focus on fleet-wide coverage.
What to do:
Fleet owners should negotiate insurance packages that offer comprehensive coverage for multiple AVs under a single policy.
12. The average cost of an AV crash is 30% higher than human-driven crashes due to expensive sensor repairs
While AVs crash less often, when they do, repairs are costly due to the advanced technology involved.
What to do:
Vehicle owners should check their insurance policies to ensure they cover sensor replacement and software recalibration.
13. 46 states in the U.S. have enacted or proposed AV liability laws as of 2024
Governments are actively updating laws to reflect the changing liability landscape in AV crashes.
What to do:
Stay updated on AV laws in your state and ensure your insurance coverage aligns with the latest regulations.
14. General Motors’ Cruise division has reported a 70% reduction in crash severity compared to human drivers
AVs are not just reducing the number of accidents but also making them less severe, thanks to precise braking and accident-avoidance technology.
What to do:
Consumers should consider AVs for their safety benefits, and insurers should adjust premiums to reflect lower crash severity.
15. 85% of insurers believe product liability will be the dominant AV insurance model in the future
As autonomous vehicles shift control from humans to software and hardware systems, insurers anticipate a fundamental change in liability. Instead of covering individual drivers, policies will focus on automakers, sensor manufacturers, and software developers.
What to do:
If you’re an insurance company, start developing policies that cover product defects, software failures, and system malfunctions. Automakers should invest in rigorous testing and maintain extensive records to defend against liability claims. Consumers should ensure their AV is always up-to-date with the latest software patches to minimize risk.
16. Autonomous taxis could reduce accident costs by over $300 billion annually once fully deployed
Autonomous taxis are expected to significantly cut accident-related expenses, including medical costs, vehicle repairs, and lost productivity. With fewer human drivers making errors, the savings for society could be enormous.
What to do:
Companies investing in AV ride-hailing services should leverage this statistic when working with insurers to negotiate lower premiums. If you’re a business considering AVs for delivery or passenger transport, take advantage of these long-term cost savings when planning fleet investments.
17. Human drivers are found at fault in 94% of AV-involved accidents
Studies show that when autonomous vehicles are involved in crashes, human drivers—not the self-driving systems—are almost always to blame. This indicates that AVs are already operating more safely than human drivers.
What to do:
If you’re a driver sharing the road with AVs, be extra cautious around them. Insurance companies should start offering discounts for AV-equipped vehicles, while policymakers should work on educational campaigns to improve human-AV interaction on roads.
18. Insurance claims for minor AV accidents are 2.5 times higher due to costly sensor replacements
Even though AVs reduce serious accidents, when they do get into minor scrapes, repair costs are significantly higher due to the expensive sensors and technology.
What to do:
AV owners should ensure they have comprehensive coverage that includes high-tech repairs. Insurers might need to adjust policies to factor in the growing costs of AV component replacement while balancing the lower accident frequency.
19. Sensor failures account for 25% of reported AV-related incidents in early trials
Autonomous vehicles rely on a combination of cameras, radar, and LiDAR to navigate. If these sensors fail due to bad weather, dirt accumulation, or technical glitches, accidents can happen.
What to do:
AV owners should regularly maintain and clean sensors, while manufacturers must invest in redundant systems to minimize single points of failure. Insurers should consider offering specialized policies that cover sensor-related breakdowns.
20. 80% of AV crashes occur at speeds under 25 mph, often in urban environments
Most AV accidents happen at low speeds in city settings, often due to confusion in complex intersections or interactions with pedestrians and cyclists.
What to do:
If you’re operating an AV in an urban area, ensure your vehicle has the latest pedestrian detection and emergency braking systems. Insurers may consider offering specialized urban AV coverage that addresses the unique risks of city driving.
21. 20% of AV accidents involve pedestrian interactions, raising liability concerns
Pedestrian-related incidents remain a challenge for AVs, as self-driving systems sometimes struggle to predict human behavior, particularly in crosswalks and busy intersections.
What to do:
Pedestrians should remain cautious around AVs and avoid unpredictable movements. Cities should consider updating crosswalk designs to accommodate AV technology, while insurers and regulators need to clarify liability rules when an AV is involved in a pedestrian accident.
22. Data-sharing between AV manufacturers and insurers is increasing, with 68% of insurers demanding access
Insurance companies recognize that AV data is essential for assessing risk accurately. They are increasingly asking automakers to share real-time driving data, accident reports, and software logs.
What to do:
Automakers must develop transparent policies for data-sharing while ensuring consumer privacy. AV owners should check their policies to understand how their driving data is being used. Insurers should refine their pricing models based on this data to offer more competitive premiums.
23. AV repair costs are 3-5 times higher than traditional vehicle repairs
While AVs promise fewer accidents, when damage does occur, repairs are expensive due to specialized technology, advanced materials, and software recalibration.
What to do:
AV owners should look for insurance policies that explicitly cover high-tech component replacements. Insurers should explore partnerships with repair shops specializing in AV technology to lower costs.
24. 56% of surveyed drivers believe they should not be liable for AV crashes while in self-driving mode
Many drivers assume that if they are not actively controlling the vehicle, they should not be held responsible for accidents. However, current laws still require human drivers to take responsibility in many situations.
What to do:
Consumers should closely read their AV insurance policies to understand their liability. Lawmakers need to clarify how responsibility is assigned when an AV is involved in an accident, ensuring a fair balance between user, manufacturer, and software provider liability.
25. By 2040, AV insurance is projected to be primarily commercial rather than personal, shifting liability to fleet operators
As autonomous technology advances, personal car ownership may decline in favor of ridesharing and AV fleets. This will change the insurance landscape dramatically.
What to do:
Insurers should start developing fleet-based policies that cover commercial AV operations. Businesses planning to invest in AV fleets should consider comprehensive coverage that accounts for liability, cybersecurity, and maintenance risks.
26. AV-related personal injury claims are 35% lower due to automated braking and avoidance features
Self-driving technology is already reducing injury claims, thanks to features like automatic emergency braking, lane departure warnings, and collision avoidance systems.
What to do:
Consumers should look for insurance discounts on vehicles equipped with these safety features. Insurers should use accident data to refine premium pricing, rewarding vehicles with a lower likelihood of severe injury claims.
27. Insurance companies are testing AI-driven claim assessments for AV-related accidents to streamline payouts
AI is playing a bigger role in insurance, helping assess damage and process claims more efficiently. This is particularly useful for AVs, where software logs can provide precise crash data.
What to do:
Insurers should continue developing AI-driven claim processing systems to improve efficiency and reduce fraud. AV owners should choose insurers that offer fast, automated claims processing for a smoother experience.
28. Global autonomous vehicle insurance is expected to reach $42 billion by 2035 due to policy shifts
As AVs become mainstream, insurance markets are rapidly expanding to accommodate new risks and coverage models.
What to do:
Investors and insurance companies should explore opportunities in AV-specific coverage areas like cybersecurity, product liability, and fleet insurance. Consumers should compare policies to ensure they get the best coverage as the industry evolves.
29. 57% of insurers predict that cyber liability insurance will be a primary coverage area for AVs
Cyberattacks on AVs pose a major risk, from hacking vehicle control systems to data theft. As a result, cybersecurity insurance is expected to become a key offering.
What to do:
AV owners should consider adding cyber liability coverage to their policies. Automakers need to invest in strong cybersecurity defenses to prevent system breaches. Insurers should develop specialized cyber policies tailored to AV risks.
30. The cost of AV-specific insurance policies is currently 20-30% higher than traditional car insurance
Despite lower accident rates, AV insurance remains costly due to high-tech repair expenses and uncertainties in liability.
What to do:
Consumers should shop around for the best AV insurance rates and look for policies that offer discounts for safe driving data. Insurers should work to refine risk models to make AV coverage more affordable.
wrapping it up
Autonomous vehicles are transforming the way we approach driving, safety, and insurance.
While they promise fewer accidents and lower human error, they also introduce new challenges—complex liability issues, expensive repairs, cybersecurity threats, and evolving regulations.
As AV technology advances, the insurance industry must adapt to new risks and create policies that reflect this changing landscape.
