The self-driving car business could become a major threat to insurance companies when the technology hits the market, billionaire investor Warren Buffett told CNBC's "Squawk Box" on Monday.

If autonomous vehicles prove to be safer than regular cars, insurance costs will plummet, and by the time roads are filled with self-driving cars, insurers like Geico will have taken a serious hit, the Berkshire Hathaway chief said. Berkshire Hathaway Homestate Companies offers commercial auto insurance.

"If they're safer, there's less in the way of insurance costs, [and] that brings down premium buy significantly," the investment guru said.

But disrupting an entire industry takes time, and the market will embrace self-driving cars slowly despite the immense amount of capital that tech companies are spending on their development, Buffett said.

"If I had to take the over and under [bet] 10 years from now on whether 10 percent of the cars on the road would be self-driving, I would take the under, but I could very easily be wrong," he said.

"It's something that billions and billions and billions are spent on, and brains are being involved in it, so it could easily come sooner than I think. And it will be negative for auto insurers," he continued.