Warren Buffett Says Automated Cars will Forever Change Auto Insurance

There is still a lot of work to be done on the autonomous driving front, as a handful of automakers steadily work the bugs out of their self-driving cars. Thus far, the results have been modestly successful, but there have been some hang-ups along the way. One big question as cars become autonomous—yes, it will happen at some point—is how it affects the insurance industry.

When asked on CNBC's Squawk Box about the impact of self-driving cars on the insurance industry, billionaire Warren Buffett said there's no question that it will be great. "Anything that makes cars safer is very pro-social, and it's bad for the auto insurance industry. But nevertheless, the auto industry has always worked on making cars safer. They've led the way on seatbelts and all that. But if there are no accidents, there's no need for insurance."

In 40 years, when all cars are theoretically self-driving, the automotive insurance industry will probably look much different, but it's very likely to survive. Banks will still loan money for drivers to buy these autonomous cars, and they'll still want policies that cover financed cars—autonomous or not.

Luckily for insurance companies, this change is far off; we have at least a decade and a half before autonomous technology can even begin to alter the automotive landscape. Today, the closest one can get to an self-driving car is the 2016 Tesla Model S with Autopilot. Tesla is currently offering its base-level Model S 70D model for just $830 per month with $6,525 due at signing. Adding Autopilot to this model adds $3,500 to the MSRP.