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Tesla insurance coming to a neighborhood near you

Tesla insurance coming to a neighborhood near you

Did anyone else pick up on the Tesla Insurance program?

If you believe in Elon's timeline, it will be coming in a month, yeah, soon... "It would be more compelling than anything else in the market."

Is it another massive money maker in the making?

mrburke | 24/04/2019

Elon said the will monitor how you drive and adjust your premium.

RoadDevil | 24/04/2019

Propose the real-time driving score & corresponding premium like the following:

Driving over the speed limit (Car Speed -speed limit) x $10x (accumulated time in hours)
Standard premium $700
Lane Change without a signal /Each + $10
Failed to stop @Stop Sign/Each +$50
Passed a red light +$100
No violation in the previous 3 months -$50
Purchased AP - 10%
Purcashed FSD -30%
...

xtcTesla | 24/04/2019

Hahaha I wouldn't want my insurance company to know my driving habits.
Unless you drive like Granny , a person would be missing marbles if they allowed an insurance company to know that data, because they would simply state it was your fault, you have proven your driving habits and here is the data to provide it.
Remember insurance companies are in the business to not pay out. If you think otherwise, your a fool.

lbowroom | 24/04/2019

If you're not at fault, data will prove that too

kaushal | 24/04/2019

Seems like a bad idea. Maybe this is just another attempt to distract wall street from bad Q1 numbers.

kaushal | 24/04/2019

@roaddevil

At other auto insurance companies, you probably will pay more for AP and FSD in the future, once they take BETA off of some of the features.

aptwo | 24/04/2019

If Tesla based the premium on how you drive then I think this is the stupidest thing I've heard today. Create a fast and agile car then penalizing you for using those features.

casun | 24/04/2019

“If you think otherwise, your a fool.“

:)

RoadDevil | 24/04/2019

@aptwo,

If you never heard insurance companies calculate policy premium using driving records as a big factor, then you are not as smart as you think yourself.

kaushal | 24/04/2019

driving record and GPS/Speed/Speed limit data are two different things.

driving record may not show you speeding if you have no speeding ticket, GPS info can easily show you % of time you're speeding. Now I think of that, it's actually very dangerous, what if Tesla start selling your actual GPS data to law enforcement and/or third party? We all know what kind of financial trouble they are as a company.

SteveWin1 | 25/04/2019

@kaushal, Tesla already has all this info on you and could already sell it if they wanted to. Any insurance company will charge you enough so that they don't lose money overall. At least with something like this, as long as you drive better than average, you should save money. Also, Tesla can repair your car at cost if it is damaged, unlike every other insurance company, and they know exactly how much everything costs so they can do a much better job of determining risks so they don't have to charge you extra as a buffer to cover as many unknowns. They also have an interest in keeping premiums down. If Tesla develops a reputation for having high insurance costs, it will hurt car sales.

Maxxer | 25/04/2019

my insurance company has Ajusto, an app I can install on my iPhone which keeps tracks of my driving habit with the accelerometer and GPS and can give up to 25% discount on my 1000$ annual insurance cost. I will install it and activate it this summer when I go for long road trips for bike rides. They calculate it on 100 days period and 1000km. You can’t pay more even if you drive it like it’s a rental

thedrisin | 25/04/2019

From Tesla website:
"We may share information we collect with our service providers and business partners, with other third parties you authorize, with other third parties when required by law, and in other circumstances."

thedrisin | 25/04/2019

@EVolution. Does your insurance company share that information with third parties?

crmedved | 25/04/2019

I use Root insurance. I drove sensibly for the two weeks they monitored me and now I'm back to driving like a lunatic :D Okay, really, I just accelerate hard because the novelty of my AWD M3 hasn't worn off yet.

Sadly AP actually decreased my score with them because of the braking when following vehicles.

I would not want to be monitored 24/7. Especially since one of the most factors usually considered is if you drive at night or not. Wanna go out after 11 pm? That'll be $X please. No thanks. And I'm convinced speed limits are set with the understanding that most people will go faster than them. I'm not gonna go 65 mph when traffic is going 80.

Granted, I might still give it a shot. If I drive like normal and it's cheaper, sign me up!

gmkellogg | 25/04/2019

Nahh I'm good. I'm not the type to put all my eggs in one basket.

Daisy the Road ... | 25/04/2019

@district in
You do realize that Tesla already collects this information, right?
Buying insurance from them won't change things in that respect.

Theoretically, they could post a customized insurance offer on on each of our car's web pages right now.

dougk71 | 25/04/2019

Insurance is a good for cash flow. You get the premiums before you have to payout . This could have a positive on collision repairs since Tesla will want to accelerate repairs to reduce costs in loaner cars. Next if third party body shops try to overcharge Tesla is in a batter position to reign this in than a typical insurer .Next as a retired actuary/mathematician they can correctly asses the actuarial risk since they have the data on miles driven per accident. Next they via cameras are in a better position to ward off fraudulent claims directed against Tesla owners.
Good news for owners and good news for near term cash flow for Tesla.

82bert | 25/04/2019

I wonder too if rates would ultimately be lower for drivers using NoA and ultimately FSD a larger percentage of the time.

Mathew98 | 25/04/2019

Driving above speed limit is not the same as aggressive driving with jack rabbit start and constant braking.

One can drive along with the traffic flow at speed and not be that bozo weaving in and out of their lane.

They may exclude @Silver from their offering simply based on his own video posted...

synfendia | 25/04/2019

Other insurance companies base their rates on a constant feed of actuarials and claims data. They have to rely upon slower, lesser quality data feeds since they cover all kinds of cars and car companies, obtaining crash info from the government and several other disparate organizations. Tesla has a huge advantage over insurance companies on this. They have way more precise, reliable, higher quality, very focused data
We all know the data-supported fact that Teslas are much safer, but have higher cost of repair. This nets out to a slight cost advantage with claims. Tesla sees that advantage since they have immediate access to that data. But the insurance companies cannot see that with the same resolution. Hence, Tesla rates could be a good degree cheaper than everyone else.

As a thought experiment, let's make a few assumptions about Tesla insurance for a moment, to see if this defuses some of the consternation:
Let's assume that Tesla's rates will start out around 10-15% cheaper for same-same coverage as your current insurance. Base rates will be based on the stats of the whole fleet, and all of the drivers.

Now, add to this plan some *completely optional* discounts (let’s say 5-10%) that could be applied if you have demonstrably safer driving habits (don't exceed speed limits by more than 15mph, allow appropriate following distance, don't run red lights, etc)

Would this incentivize you to drive better? Probably for many.
Would some say, hell with it. I bought a Tesla so I can tear up the asphalt? Sure. They're free to waive the discount.

The only problem I see with the Tesla Insurance model is the customer service side.
Tesla's customer service for sales and service is still rather awful. I can't imagine that adding an insurance arm to the business will magically make that aspect of Tesla improve. For some, such as myself, this could be worth the extra $$ to get insurance elsewhere than Tesla. We'll see.

terminator9 | 25/04/2019

If it's a lot cheaper I will certainly get it. I don't drive like there is no tomorrow. If Tesla believes that FSD would be better than humans then the insurance better be cheaper.

pgkevet | 25/04/2019

The tongue in cheek answer is that one can buy the insurance now and it'll be activated over the air in the 'near' future when the insurance upgrade is available...

The real reason is likely that with the development of robotaxis and the tesla robofleet that you can theoretcally add/remove your car to monetise it there has to be a new form of insurance to cover ocassional outsourced self-drive use - assuming any of these things come to pass and assuming folk are prepared to allow strangers to use their cars - drunks vomiting in them, students bonking on the back seats, used for the occasional silent drive-by etc. Presumably why they fitted the inside camera to the 3 (pay to view on the Tesla pornhub?)

casun | 25/04/2019

rates based on driving style (which is directly related to your risk) is how insurance should work. i think this is a great idea.

thedrisin | 25/04/2019

Tesla already has earnings problems. If they try to give steep discounts to attract customers, they are at risk of losing money. Get profitable first.

RJMIII | 25/04/2019

@synfendia - I see comments all the time about Tesla service being bad or "awful" in your words . I don't get this. I've had four service appointments since owning the car in August 2018. One to replace my 12 volt battery and three tire rotations (yes I have 22K miles on the car in 9 months).

All were done by mobile rangers in the parking lot of my office. All were scheduled using the phone app with no issues. The only surprises were that they usually take the opportunity to do work for me that I didn't request. Actually the first service appointment, they called me to let me know that they wanted to replace the 12 volt battery. I hadn't had any issues with it but they wanted to give me a new one so I didn't argue. During the first tire rotation, the tech noticed that some clips were missing from the front wheel well so he installed them for me. At my third tire rotation, they replaced a shim on the trunk latch that was under warranty. They also always make sure the software is up to date.

I've spent $225 on service for 22K miles. I'll take a cost of $0.01 of maintenance per mile.

Rt002k | 25/04/2019

We'll see if Elon puts his money where his mouth is. They use their data to tout that AP is so much safer than all other cars. If that doesn't bear out in their premiums, something fishy.

It SHOULD be cheaper, since their cost to repair is at their own cost rather than paying a body shop that also needs to make a profit. Cut out the middle man, or two (OEM part mfr, body shop) saves money. Whether they pass that on to the consumer is another question.

xtcTesla | 25/04/2019

@RJMIII
Good to hear the positives verses the negatives.

Magic 8 Ball | 25/04/2019

@Rt002k So you don't think TESLA shops or insurance should make a profit?

NOLEK SUM | 25/04/2019

“Is it another massive money maker in the making?”

HUH? What planet do you live on? What are the other MMMs?

May be he should learn how to build cars profitably and efficiently first. One must learn to walk before one runs ...

Rt002k | 25/04/2019

@M8B - I do think they should make a profit. But when you are vertically integrated the way this would be (presuming it is done efficiently), it costs less to operate, so requires less to make a profit. There are two fewer "backs of the house" that need a cut. Why do you think every time companies merge it's the mid-upper level management and admin groups that see the biggest cuts?

xtcTesla | 25/04/2019

My insurance will go up 5.34 a month, once i get the car. I was stunned due to the sticker price. I asked and was told it was due to its safety ratungs, which it should.
If their is insurance lower, i will be all over it, not just because of the premiums but because the service will be performed by Tesla but the only problem with that, they will have to open a whole lot of service centers.
If its higher, its a cash grab.

Yodrak. | 25/04/2019

There are several insurance companies that offer customized rates based on the use of a telematics device to monitor driving behavior. Tesla would not be unique in that respect.

One thing to keep in mind that hasn't been mentioned is that most insurance companies offer discounts for bundling one's car insurance with their homeowner's insurance. Will Tesla have a 'partner' to provide the homeowner's insurance (like Geico does)? Look at you total insurance cost - an auto discount may be offset by a homeowner's increase, even with an insurance company that bundles.

Silver2K | 25/04/2019

This insurance idea is not for what you're thinking folks, this is for the robo-taxis mainly

SteveWin1 | 25/04/2019

@Rt002k is right.

Having cheap insurance would lead to more Model 3 sales. More Model 3 sales would lead to more profit for the insurance and service centers. Its in Tesla's best interest to be able to undercut the competition, which they absolutely should be able to do. They'll have a better handle on the risk for insuring each individual customer, compared to a third party, and they'll be able to repair the cars for cheaper. I just had to deal with an insurance company after a valet damaged my car and they took 2 weeks to get a third-party appraiser to come out and look at the damage. The sidewall of my tire was damaged, so it wasn't safe to drive, so they had to pay for me to drive around in a rental car. After 2 weeks, they finally approved the exact amount that I had asked for originally, based on the estimate I got directly from Tesla. Tesla would have saved the appraiser cost and the rental car in this situation and they would have just fixed my car (took a mobile technician 20 minutes once I finally got approval). At least some of that savings would be passed on to consumers.

Right now, the model 3 is new, its expensive to repair, and parts take time to get, which means more time in a rental. All those things mean higher premiums. If Tesla prioritized their insurees, they wouldn't have these problems. They have tons of data on how risky the car is, and they control the parts supply.

Unfortunately, after trying to deal with customer service about a myriad of issues, I don't think I'd switch to Tesla insurance unless it was SIGNIFICANTLY cheaper or I heard back from customers that it doesn't suck as much as their customer service does. I love Tesla, but we all know their communication is awful and sometimes getting them to do something is like pulling teeth.

thedrisin | 25/04/2019

@SteveWin1. After a recent accident (non-Tesla vehicle) my insurance company had me use their app and send pictures instead of having an appraiser come out. They sent me the appraisal in 24h. The body shop accepted the appraisal.

Rt002k | 25/04/2019

@SteveWin - another thing that muddies the water for other insurance companies is if Tesla prioritizes their insurance customers first, then repair delays for other insurance companies will get even worse.

PhillyGal | 25/04/2019

Safety matters too. Crashes in Teslas result in fewer/less severe injuries and fewer deaths than almost every other vehicle on the road. That's a big part of insurance risk and price calculations. Other insurance companies that charge a lot for Tesla cars are most likely doing so based on the purchase price and high repair cost.

Magic 8 Ball | 25/04/2019

@Rt002k Vertical integration can cut costs for same type of business (I.E. bank buying bank). Insurance and building/selling cars are two different animals and two different infrastructures.

Mathew98 | 25/04/2019

How about body shop and auto insurance? Are they related now?

There are different levels of vertical integration. How many levels have you skimmed through?

RoadDevil | 25/04/2019

@M8B,

Bank buying another bank is vertical integration? What is horizontal integration then ?

Magic 8 Ball | 25/04/2019

Oops! The point is horizontal integration is where you get to fire a bunch of redundant people. Vertical integration requires a President or VP or that division to suck the money out same as any standalone.

Rt002k | 25/04/2019

But you don't need an entirely separate accounting, POS, and CRM system for that division of the company. Or an entire HR department, just a group. Or an entire different company campus.

Magic 8 Ball | 25/04/2019

I guess that would depend on the different regulation requirements for the different types of business.

Are there any car companies offering their own brand of collision or comprehensive insurance currently?

RoadDevil | 25/04/2019

GMAC is wholly owned by GM I think

RoadDevil | 25/04/2019

GMAC is wholly owned by GM I think

Rt002k | 25/04/2019

Are there any other car companies offering their own dealerships or service centers?

Companies branch out of their core business all the time.

Mathew98 | 25/04/2019

Were there other companies using reusable rockets to reduce costs by 90% before SpaceX came along?

We're there other major car companies selling directly to the public without a dealership network before Tesla came along?

Try thinking outside the box perhaps?

Magic 8 Ball | 25/04/2019

How about sticking to regulatory requirements?

kaushal | 25/04/2019

@Rt002k

That may not be the case at all, Insurance operators are heavily regulated at state levels and each state has it's own set of regulations written by lobbyists who want to reduce competition in local markets, Any business where there is too much government involvement, is not good for a company like Tesla that fancies itself as an efficient company.

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