Buffett speaks up on what driverless cars will mean for car insurance

Driverless cars will eventually, and inevitably, arrive – the question is when it will happen.

For Warren Buffett, CEO of Berkshire Hathaway, which owns Maryland-based auto insurer Geico, that raises another question: what does this mean for car insurance?

“Driverless cars will reduce — perhaps dramatically — the need for auto insurance if they’re safer,” Buffet told Yahoo Finance. “If driverless cars are successful and people don’t hack into ’em, that will reduce auto insurance premiums — and perhaps drastically reduce them.”

The legendary investor and CEO said the potential lowering of premiums won’t be necessarily bad for business. Car insurance will likely remain as the government requires a degree of it in many states. Also, the added safety doesn’t just mean cheap premiums, but also cheap payouts.

“You want safer cars. Safer cars mean lower insurance. Safer driving means lower insurance costs,” Buffett told the news website.

The 87-year-old Nebraskan also noted that there is still uncertainty around the timeline, which means the insurance business is under little pressure to change. The recent incidents with Uber and Tesla have put a stop on what had been a surging pace of technological development.

“How fast that comes or anything, I don’t know,” Buffett told Yahoo Finance said. “I think it’s a long time off.”