Hmn... Ok. This seems like it could relate to one of the bugs I fixed for 1.1.2, but I'm not able just now to reproduce it (autopilot seems to work fine.) At any rate this shouldn't happen, autopilot is definitely smart enough to fly you above the terrain to your target.
If this happens again, can you please send the file trace.txt to email@example.com
? This might contain some clues as to what is going on. It turned out in the previous version that there was a bug in the autopilot, but it has been fixed. However, there is now extra trace information to help me see what goes wrong.
Barring that, can you maybe let me know what World, System, and Planet you were on when the autopilot failed like this? That will help me as well, since I can test it out in other conditions.
Thanks for the bug report!