Late Wednesday, Tesla seemingly gave Tesla owners and intenders what they’ve been looking for: an opportunity to lower their insurance premiums. For a number of reasons, mainly high claim frequencies and the cost thereof, Tesla owners often find themselves saddled with sky-high coverage costs.
What if Tesla provided that insurance?
Owners will soon find out the pros and cons of such a setup, as Tesla has now rolled out its promised Tesla Insurance — a product the automaker claims will benefit owners by offering “up to 20% lower rates, and in some cases as much as 30%.”
With coverage offered initially to California residents (no word on when other states come onboard), the Tesla Insurance
website went live last night, then promptly went blank. It currently reads “Algorithm update in progress.”
Tesla CEO Elon Musk first floated the concept of Tesla Insurance back in April, with some questioning how the automaker could afford the offering given the price it charges insurance companies for replacement parts.
“Because Tesla knows its vehicles best, Tesla Insurance is able to leverage the advanced technology, safety, and serviceability of our cars to provide insurance at a lower cost,” the automaker wrote in a blog post. “This pricing reflects the benefits of Tesla’s active safety and advanced driver assistance features that come standard on all new Tesla vehicles.”
Not long ago, the Insurance Institute for Highway Safety declared the Tesla Model 3 to be the most expensive 2018 model-year vehicle to insure in the United States. A year earlier, AAA-The Auto Club Group, citing claims data from the Highway Loss Data Institute, said premiums for Tesla vehicles should go up to the tune of 30 percent. French insurer AXA recently claimed electric luxury vehicles are 40 percent more likely to be involved in an accident.
Certainly, Tesla likes to tout its vehicle’s fleet-footedness, and videos continue to appear online of Tesla owners dangerously misusing their vehicle’s semi-autonomous Autopilot feature. Snoozing behind the wheel usually doesn’t lead to lower premiums.
Initially, Tesla might realize a windfall from this gambit, but one wonders what will happen when the unprofitable company has to pay out.
