Autonomous vs. Manual Driving: How Insurance Costs Are Set to Change

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Introduction: The Changing Face of Auto Insurance

The rise of autonomous vehicles (AVs) is fundamentally reshaping the auto insurance industry. As self-driving technology becomes more advanced and common on U.S. roads, both consumers and insurers are grappling with key questions: Will insurance costs drop for autonomous vehicles compared to manual driving? How does liability shift, and what practical steps should drivers and vehicle owners take to secure the right coverage? This article provides an in-depth, actionable comparison of insurance costs for autonomous versus manual driving, highlighting emerging trends, state regulations, and guidance on navigating the evolving insurance marketplace.

Insurance Cost Trends: Autonomous vs. Manual Driving

Recent research suggests that insurance costs for autonomous vehicles could drop by more than half by 2040 . According to a 2025 analysis from Goldman Sachs, as self-driving technology reduces human error and accident frequency, average insurance costs are projected to fall from $0.50 per mile today to approximately $0.23 per mile by 2040 [1] . This dramatic reduction is fueled by fewer accidents, but there are important caveats and complexities to consider.

For comparison, the average annual full coverage premium for a traditional (manual) vehicle in 2025 was $2,638 nationally, up 12% from 2024 [5] . Manual driving insurance rates factor in driver history, vehicle type, location, and other risk factors. In contrast, AV insurance places greater weight on technology, system reliability, and legal liability for hardware or software failures.

Why Autonomous Vehicle Insurance May Cost Less

The potential for lower insurance costs with self-driving cars rests on several pillars:

• Fewer Accidents: The majority of traffic accidents result from human error. AVs, designed to follow traffic laws, avoid distractions, and react quickly, are expected to decrease accident rates significantly [2] .
• Reduced Claim Frequency: As accident rates decline, insurers are likely to see fewer claims, enabling lower premiums for owners of autonomous vehicles.
• Manufacturer Liability: Increasingly, liability may shift from individual drivers to vehicle manufacturers or software providers if an accident is caused by a system failure or cybersecurity breach. This could further reduce individual premiums, although it raises new questions for the industry [2] .

Despite these potential savings, some factors could offset the lower frequency of claims:

• High Repair Costs: The advanced sensors, cameras, and computing systems in AVs are expensive to repair or replace, so the cost per claim may rise even as claims become less frequent [4] .
• Legal and Regulatory Uncertainty: As laws and liability frameworks evolve, insurers may be cautious or charge higher premiums to cover unforeseen risks.

Insurance for Manual Driving: The Status Quo

Manual drivers continue to face traditional risk assessments based on personal driving records, vehicle type, and geographic risk factors. The average cost for full coverage insurance in the U.S. has risen substantially, reaching $2,638 in 2025 [5] . Key factors influencing manual driving insurance include:

• Driver’s Age and Experience: Younger and less experienced drivers typically pay higher premiums.
• Accident and Violation History: Past accidents, speeding tickets, and DUIs raise insurance costs.
• Location: Urban areas with higher accident and theft rates often see more expensive premiums.

Manual driving insurance is generally easier to obtain and more standardized, but it lacks the advanced risk mitigation features of AVs.

State Regulations and Insurance Requirements for AVs

Insurance requirements for autonomous vehicles vary by state, reflecting the rapid evolution of both technology and regulation. For example:

• California: Requires companies testing AVs to hold at least $5 million in coverage, with hybrid policies combining personal and product liability. Strict reporting of disengagements and crashes is enforced [3] .
• Arizona: Favors pro-business policies and encourages AV testing, with higher commercial coverage limits and mandatory detailed crash data reporting.
• Texas: Permits fully driverless operation for commercial fleets, using telematics to set rates and verify accident details.
• Florida: Mandates a minimum of $1 million in coverage for fully autonomous vehicles, with a potential shift in its no-fault system if AV technology is at fault.

Because these requirements differ widely, it is crucial to check with your state’s department of motor vehicles or insurance commission for the latest mandates and recommendations. You can search for “[Your State] autonomous vehicle insurance requirements” on official state websites or contact your insurance provider for up-to-date guidance.

How to Access and Compare Insurance for Autonomous and Manual Vehicles

Securing insurance for either type of vehicle involves distinct steps and considerations. Here’s how to approach each:

For Autonomous Vehicles:

1. Research Insurers: Not all insurers offer coverage for AVs. Start by contacting established auto insurers and asking about autonomous vehicle policies. Some manufacturers (e.g., Tesla, GM, Rivian) now offer in-house insurance for their vehicles [1] .
2. Review State Requirements: As noted, coverage minimums and liability frameworks can differ. Visit your state’s official DMV or insurance commission website for specifics.
3. Assess Technology Coverage: Ensure the policy explicitly covers both personal liability and product liability related to autonomous functions.
4. Request Quotes: Provide details about your AV’s make, model, and autonomous capabilities. Compare at least three quotes, as pricing models are evolving rapidly.
5. Ask About Data Sharing: Some AV policies may require sharing vehicle data (e.g., telematics, system logs) after an incident. Confirm privacy policies and data handling procedures.

For Manual Vehicles:

1. Gather Your Information: You will need your driver’s license, vehicle registration, driving history, and desired coverage levels.
2. Shop Around: Use insurer websites, independent agents, or online comparison tools to obtain quotes from multiple companies.
3. Review Discounts: Many insurers offer discounts for good drivers, bundled policies, or safety features.
4. Select and Apply: Once you choose an insurer and policy, complete the application process and provide payment.

Liability Considerations: Who Pays When Something Goes Wrong?

One of the most significant shifts in the AV era is the evolving question of liability. With manual driving, the at-fault driver (or their insurer) is typically responsible for damages. With AVs, liability may shift toward the manufacturer or technology provider if a system failure caused the accident [2] . This introduces new complexities:

• Product Liability Insurance: Manufacturers may need to carry separate product liability insurance, which could affect the cost structure of consumer auto insurance.
• Mixed-Use Vehicles: For vehicles that can switch between autonomous and manual modes, policies must clarify coverage for incidents occurring in each mode. Owners should review policy documents carefully and ask insurers for clarification.
• Claims Process: If you are involved in an accident with an AV, treat it as you would any other accident-document the scene, exchange information, and report the incident to your insurer [4] . In the future, reporting may become more automated as vehicles log and transmit incident data.

Potential Challenges and Solutions

As the insurance market adapts to autonomous vehicles, several challenges persist:

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• Uncertainty in Premiums: Some experts predict insurance costs for AVs will decrease, while others caution that higher repair costs could offset savings [4] . For now, expect pricing to be in flux and subject to change.
• Limited Availability: Not all insurers currently offer AV-specific coverage. If you cannot find an AV policy, consider contacting your vehicle manufacturer or searching for specialized AV insurance providers.
• Regulatory Gaps: State and federal regulations are still catching up with technology. Stay informed through your state’s DMV and consult your insurer about any changes that may affect your coverage.

Alternative Approaches: If you are unable to access specialized AV insurance, consider hybrid policies or high-limit commercial policies that can bridge the gap until more tailored options become available. Engage with local agents who stay updated on regulatory developments and can offer personalized advice.

Key Takeaways and Next Steps

The insurance landscape for autonomous versus manual driving is in a state of rapid change. While early indicators suggest that AVs may offer substantial premium reductions over time, the market is still evolving. To protect yourself and your vehicle:

• Regularly review your state’s official insurance requirements for autonomous vehicles.
• Contact both mainstream and specialized insurers for up-to-date policy offerings and pricing.
• Carefully review liability provisions, especially for mixed-mode vehicles.
• Document any incidents thoroughly and follow standard claims procedures.

For more information or to get started, you can search for your state’s Department of Insurance or DMV website, or contact your current insurer to discuss how autonomous technology may impact your premiums and coverage options.

References

• [1] Interactive Brokers (2025). Self-Driving Cars May Slash Insurance Costs 50% By 2040.
• [2] Fortune (2025). Goldman Sachs predicts autonomous cars will slash insurance costs by 50%.
• [3] Inszone Insurance (2025). Impact of Autonomous Vehicles on Auto Insurance in 2025.
• [4] AutoInsurance.com (2024). Auto Insurance for Self-Driving Cars.
• [5] Bankrate (2023). The True Cost of Auto Insurance in 2025.