Autonomous Vehicle Insurance: What You Need to Know

Autonomous Vehicle Insurance: What You Need to Know

/ Autonomous Vehicle / By

With the rise of self-driving cars, the way we think about car insurance is evolving. Traditional insurance policies were designed for human drivers. However, with autonomous vehicles on the road, the question arises: Who is responsible in case of an accident? This is where autonomous vehicle insurance comes in.

Table of Contents

Understanding Autonomous Vehicle Insurance

As self-driving cars become more common, insurers are developing new policies to cover them. Unlike conventional car insurance, which is based on a driver’s history and behavior, autonomous vehicle insurance considers factors such as software reliability, sensor accuracy, and manufacturer liability.

Imagine this: You’re relaxing in your Tesla, which is navigating traffic perfectly. Suddenly, another vehicle swerves into your lane, and an accident occurs. Who pays for the damages? Is it you, the manufacturer, or the software provider? This is exactly why autonomous vehicle insurance is crucial.

How Does Autonomous Vehicle Insurance Work?

Autonomous vehicle insurance works differently depending on the level of automation. The SAE International levels of automation range from Level 0 (no automation) to Level 5 (fully autonomous). At higher levels, the vehicle, not the human, is in control, shifting liability toward manufacturers and software developers.

Most self-drive car insurance policies consider:

  • Third-party liability – Covers damages if your car causes an accident.
  • Product liability – Covers faults in the vehicle’s software or hardware.
  • Cybersecurity coverage – Protects against hacking attempts.
  • Personal injury protection – Covers medical costs if an accident occurs.

Deciding who pays for an accident with a self-driving car isn’t just about insurance—it’s also about fairness and the ethical choices made by the car’s technology.

How Much Does Autonomous Vehicle Insurance Cost in the UK?

If you’re in the UK, you might wonder, How much does autonomous vehicle insurance cost in the UK? The price varies based on several factors:

  • Vehicle make and model – A Tesla with advanced self-driving features may have different insurance rates than a Waymo vehicle.
  • Level of automation – Partially autonomous cars might have lower premiums than fully autonomous ones.
  • Manufacturer coverage – Some companies include insurance in the purchase price, reducing consumer costs.

Tesla and Autonomous Vehicle Insurance

Tesla owners need unique autonomous vehicle insurance because Tesla offers its own insurance program in certain regions. Tesla uses real-time driving data to adjust premiums, rewarding safer driving. However, if your Tesla is involved in an accident while in Full Self-Driving (FSD) mode, the liability could be shared between the driver and the automaker.

Robotaxi Insurance: What About Fully Autonomous Ride-Sharing?

Robotaxi insurance is another evolving area. Companies like Waymo and Cruise operate fleets of self-driving cars that offer rides without a human driver. In these cases:

  • The operator of the fleet (e.g., Waymo) typically holds the insurance policy.
  • Riders may receive personal injury protection in case of an accident.
  • Liability could shift depending on whether the incident was due to software failure or another driver.

Insurance Challenges for Driverless Cars in the UK

The UK is actively developing policies for driverless cars UK, ensuring safety and accountability. The Automated and Electric Vehicles Act 2018 set the foundation for liability. Stating that insurers must cover accidents caused by an autonomous vehicle when it is driving itself. However, challenges remain:

  • Data access – Who owns and can access accident data?
  • Cybersecurity risks – How do insurers assess risk from hacking?
  • Legal liability – If a software update causes an accident, is the driver or the manufacturer responsible?

As autonomous vehicles become more common, insurance rules must keep up with new laws and safety regulations to ensure fair coverage and protection for everyone

How to Get Autonomous Vehicle Insurance 

If you’re considering a self-driving car, here’s how to ensure you have the right coverage:

  1. Check with your manufacturer – Some companies offer built-in insurance options.
  2. Compare policies – Look for insurers specializing in autonomous vehicles.
  3. Understand coverage levels – Ensure you have protection against cyber threats, software failures, and third-party claims.
  4. Stay updated on regulations – Laws governing autonomous vehicle insurance are evolving.

Final Thoughts: Is Autonomous Vehicle Insurance Worth It?

As autonomous vehicles become more common, self-driving car insurance will be essential. The technology promises fewer accidents and lower risks, potentially reducing premiums. However, it also introduces new challenges that require innovative insurance solutions.

If you’re considering an autonomous vehicle, understanding your autonomous vehicle insurance options will help you make a better decision. With the right coverage, you can enjoy the future of driving with peace of mind.

Frequently Asked Questions (FAQs) About Autonomous Vehicle Insurance

1. How will autonomous vehicles affect insurance?

The rise of autonomous vehicles is set to revolutionize the insurance industry. Traditional car insurance is based on assessing human driver risk, but with self-driving cars, the liability shifts toward vehicle manufacturers, software developers, and AI systems. Here’s how insurance will change:
Liability Shift: If an autonomous vehicle causes an accident, insurers will determine whether the fault lies with the vehicle owner, software, or manufacturer. New insurance models, such as product liability coverage, will become more common.
Lower Premiums Over Time: Self-driving cars are designed to reduce human errors, so accident rates may drop. This could eventually lead to lower insurance premiums, but until AVs are fully adopted, mixed traffic conditions might keep premiums high.
New Coverage Types: Insurance policies will likely cover risks like cybersecurity threats, software failures, and hacking—unique to autonomous vehicles.
Robotaxi Insurance: The rise of robotaxis, or autonomous ride-hailing services, will require specialized insurance policies covering both passengers and third parties.
Insurers are now adapting by offering hybrid coverage, balancing traditional driver liability with autonomous system risks.

2. Are autonomous vehicles legal in the UK?

Yes, but with strict regulations. The UK is one of the leading countries preparing for the future of driverless cars. The Automated and Electric Vehicles Act 2018 laid the foundation for autonomous vehicle insurance and liability frameworks.
Currently, the UK allows self-driving features under controlled conditions. Fully driverless cars in the UK are still in the testing phase, but the government has set an ambitious goal to allow Level 4 and Level 5 automation on public roads by 2025.
The key regulations include:
Insurance Requirement: All self-driving cars must have autonomous vehicle insurance that covers accidents caused by the vehicle itself.
Safety Approvals: Only vehicles that pass strict autonomous safety tests can operate legally.
Geofencing Rules: Some AVs are permitted in limited areas, such as designated testing zones and smart road networks.
As the laws evolve, self-driving car insurance policies will need to adapt to provide coverage that aligns with new legal standards.

3. How many accidents with autonomous vehicles?

Accident data for autonomous vehicles varies, but reports indicate that self-driving cars are generally safer than human drivers—though not entirely accident-free.
According to studies from the National Highway Traffic Safety Administration (NHTSA) and UK transport regulators. Autonomous vehicles have been involved in hundreds of reported incidents, but most were minor collisions. Key insights include:
Human drivers are at fault in most AV crashes. Studies show that many accidents occur because human drivers misjudge the actions of AVs, leading to rear-end collisions.
Tesla's Full Self-Driving (FSD) system has logged millions of miles but has also faced careful examination over accident reports. Some high-profile crashes have led to investigations into autonomous vehicle safety.
Robotaxi accidents have been reported, with companies like Waymo and Cruise facing occasional incidents—mainly in urban environments with unpredictable human behavior.
While self-driving cars aim to reduce accidents, regulators are still working on safety validation before mass adoption.

4. How much does an autonomous vehicle cost?

The cost of autonomous vehicles depends on the level of automation, brand, and technology used. As of now, fully autonomous cars are not widely available for consumers, but here’s a breakdown:
Tesla’s Autopilot & Full Self-Driving (FSD): While Tesla does not yet sell a fully autonomous car, its FSD package costs an additional £10,000+ on top of the car price.
High-End Robotaxis: Companies like Waymo and Cruise invest millions per vehicle in advanced LiDAR, AI, and safety systems. However, these are not for personal use.
Driverless Car Cost in the UK: If fully self-driving cars become available to consumers, early estimates suggest prices could start from £50,000–£100,000, depending on the brand and technology.
Autonomous Vehicle Insurance Cost UK: Insurance for these vehicles could initially be higher due to expensive technology and repair costs, but as adoption grows, prices may decrease.
For now, self-driving technology remains a premium feature rather than a standard option in everyday vehicles.