As autonomous vehicles (AVs) move closer to mainstream adoption, one pressing question is emerging for consumers: how will these self-driving cars be insured? While most AVs still feature steering wheels, the insurance landscape is undergoing unprecedented changes.
Levels of Automation and Liability
The Society of Automotive Engineers (SAE) classifies autonomous driving into six levels:
- Level 0: Fully human-driven, no automation
- Level 1: Driver-assist features such as lane-keep assist
- Level 2: Partial automation requiring driver supervision
- Level 3: Conditional automation; vehicle can operate on its own but may request driver input
- Levels 4 & 5: Full automation, no driver input required
Vehicles currently on the road are mostly Levels 0–2. Insurance liability remains with the driver since these systems require full attention. Level 3 and above vehicles, however, can operate autonomously in most conditions, shifting liability from driver to car and creating new challenges for insurers.
New Insurance Models for AVs
Level 3–5 AVs generate proprietary data—including vehicle status, software configurations, and override logs—that insurers need to calculate premiums. Traditional underwriting metrics, like driver age or accident history, are no longer sufficient.
Some automakers are already offering their own insurance solutions. Honda provides coverage nationwide through Honda Insurance Solutions, while Tesla and General Motors offer in-house policies in select states. These policies leverage vehicle telemetry—tracking braking, acceleration, driving at night, and long-distance travel—to set rates, similar to programs like Progressive’s Snapshot but integrated directly into the vehicle’s system.
Autonomous Ride-Sharing Fleets
Insurance for AV fleets used in ride-sharing differs from private vehicles. For example, Waymo insures its autonomous Jaguar I-Pace vehicles through the technology provider rather than the manufacturer. This model highlights the growing complexity of liability and risk allocation in the autonomous driving era.
Regulatory Landscape
At present, there is no comprehensive federal law governing AV usage, though states maintain individual regulations. The U.S. Senate is considering S.1798—the Autonomous Vehicles Act of 2025—which defines AVs as Level 4 or 5 and provides guidance for liability, safety standards, and insurance frameworks.
Unanswered Questions
As AV technology evolves, key questions remain: Will manufacturers share vehicle data with outside insurers? How will policies account for partial versus full autonomy? Who will be liable in accidents? Industry experts note that ongoing dialogue between automakers, insurers, and regulators will shape the future of AV insurance over the next decade.
Understanding these changes is crucial for consumers. As autonomous capabilities increase, insurance policies will rely on advanced telemetry and manufacturer-provided data to assess risk and protect both drivers and vehicles in this new era of mobility.
