Regulators and insurance companies are unprepared to welcome even incremental steps that allow hands-free driving—a reality that could blunt demand for even limited self-driving technology.

“Why buy an autonomous vehicle if you have to maintain control?” asks Adrian Lund, president of the Insurance Institute for Highway Safety, who predicts hands-free driving systems won’t be offered soon because of legal and insurance barriers. While some states allow professional drivers to experiment with autonomous controls, not one has issued a plan that allows everyday road warriors take their hands off the wheel for significant periods.