Warren Buffett Makes Worrisome Car Insurance Prediction

In the world of investment, one rock star towers above the rest when it comes to people who are respected and listened to: Warren Buffett.

The Berkshire Hathaway founder and CEO, who has said he plans to retire at the end of 2025, led his very last Berkshire Hathaway annual shareholder meeting in May, marking the end of an era.

????????Don't miss the move: Subscribe to TheStreet's free daily newsletter????????

Naturally, investors are more interested than ever about what Buffett has to say, especially considering the uncertain nature of the economy in light of President Donald Trump's tariff plans.

Related: Nvidia CEO hits Warren Buffett milestone

Buffett covered a wide array of topics, from the stock market to AI to the U.S. budget deficit and even his own retirement.

But one thing Buffett said about the future of self-driving cars and how they may affect the world of car insurance stood out in particular — and if he's right, the consequences could be devastating

Buffett's take on car insurance

During one part of the shareholders meeting, Buffett turned the topic to car insurance and how it could be affected by the development of self-driving cars, suggesting it could lead to a massive change in the future.

"Well, let's just take the extreme example; let's say there are only going to be three accidents in the United States next year for some crazy reason," Buffett said. 

"Anything that reduces accidents is going to reduce costs, but that's been harder to do — people have done it before, but obviously if it really happens, the figures will show it, and our data will show it, and it will come down."

"If accidents get reduced 50%, it's going to be good for society, and it's going to be bad for insurance companies' volume. But good for society is what we're looking for," Buffett finished.

Buffett is not the first to address the topic, as many have wondered if they need to be insured if the car is driving itself. Some insurance companies, such as Progressive, have directly addressed the question on their websites.

Related: Warren Buffett’s quiet strategy that built a $700B empire

"It's still very early to predict how driverless cars may ultimately impact the car insurance industry," a statement on Progressive's website reads. "For now, vehicles with automation are still subject to the same state minimum car insurance requirements as other vehicles."

However, Progressive also admits that "there is hope that autonomous vehicles may help reduce crash rates, especially those caused by distracted driving."

The business of human error

The motor vehicle insurance market is a massive one, worth 911.6 billion as of 2024 and estimated to grow to USD 1,949.9 billion by 2034, per research from market.us.

While car insurance is required in many states for car owners, it's also an expensive investment — and one that continues to grow more expensive with time.

U.S. auto insurance rates have increased by 31 percent from 2023 to 2025, per Nerdwallet data, making the cost of owning and driving a car more expensive than ever.

If Buffett is right, though, and fully autonomous cars become more common in the future, it could cause real problems for the car insurance market.

In June, Goldman Sachs predicted insurance costs will one day be cut in half as there are fewer human-caused accidents. 

But that could lead to an interesting turnaround — liability for accidents could be aimed at manufacturers if tech in the car malfunctions and there's no human driver to blame.

Related: Warren Buffett has a very unusual plan for his retirement