To find a concrete dollar figure that’s relevant to the average driver, I asked the actuaries at MetroMile to examine Google’s accident reports and construct their own pricing model for self-driving cars.
The insurance model is based on a 20-year-old single female in the San Francisco area, driving 12,000 miles a year. Most of the cost savings from self-driving cars come from the expected near elimination of accidental collisions (we used a 90 percent reduction figure).
So why do we still need insurance if so few cars get into accidents?
The model still estimates that some cars may be vandalized or broken into, which makes up much of the yearly insurance cost for autonomous vehicles. In the future, self-driving cars could just park themselves in a secure garage at night rather than waiting around while their owner sleeps or goes grocery shopping — making the price even cheaper.
If say Tesla’s third vehicle — expected to cost $35,000 — is self-driving, and draws the insurance rates we suggest above, it could save thousands in insurance over the course of the vehicle’s life. This would make it and other self-driving cars potentially more appealing economically than, for example, a human-driven BMW 2 Series.
“I would anticipate that in the short and medium term, claims are likely to gradually go down as crashes become less common,” says James Anderson, a behavior scientist at the Rand Corporation, who recently wrote about the long-term impacts of self-driving cars [PDF].
“At some point in the future, it is likely that we will get to 90 percent reductions in savings,” said Anderson, who imagines that such savings could be realized in 10 or more years (once self-driving cars are universal).
Self-driving cars are generally not yet legal and state governments have been slow to permit them. Self-driving cars face roadblocks from cautious lawmakers and could, eventually, face hurdles from the auto industry.
But if consumers know that such laws are costing them $1,000 a year, public pressure could speed their legal standing.