Tesla owners are already getting insurance discounts for using Autopilot

Tesla owners in Ohio are now eligible for an insurance discount — and the move speaks to a much larger shift in the insurance industry.

Root Insurance, a company based in Columbus, Ohio, announced in a March 9 blog post that Tesla owners are now eligible for a discount if they use Autosteer, a flagship feature of Autopilot that keeps the car in its lane even when approaching curves.

Root Insurance said the move is in response to a government report that found crash rates for Tesla vehicles have plummeted 40% since Autosteer was first installed in 2015.

Drivers must download the Root app and conduct a test drive with Autosteer activated. The insurance agency will then offer a tiered discount based on the number of miles driven. That discount will increase the more a Tesla owner drives with Autosteer activated.

Naturally, it’s a smart way to encourage Tesla owners in Ohio to switch insurance companies. But it also speaks to a much larger disruption: as cars become safer with autonomous tech, insurance premiums will have to fall.

Tesla itself is already experimenting with that model in Hong Kong and Australia. The automaker has partnered with insurance companies to include insurance and maintenance into the final price of its vehicles.

New insurance models are expected to proliferate as other automakers advance their self-driving car efforts as well. The personal auto insurance sector could shrink to 40% of its current size within 25 years as insurance premiums fall due to self-driving tech, according to a report by the global accounting firm KPMG.

Root, for its part, said it plans to extend its Autosteer discount program to “drivers of all self-driving cars” later in 2017.

“We created Root to be the car insurance of the future,” Root wrote in its blog post. “Artificial intelligence? Self-driving cars? We’re ready.”

NOW WATCH: Tesla will begin selling its Solar Roof this year — here’s everything you need to know

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.