As he did with the electric car industry, Elon Musk aims to revolutionize car insurance, promising drivers up to 60% off their premiums.
Tesla Insurance launched in Colorado, Oregon and Virginia this month, after bringing its services to Texas, Illinois, Arizona, Ohio and (to a limited extent) California.
The company, which hopes to expand to most other states this year and internationally in the future, says its customers are now free to be judged on their credit, age, gender or even history. of disasters.
While that all sounds enticing, Tesla Insurance might not be a perfect option for everyone — if it’s even an option at all.
Are you part of the club?
From the outset, Tesla Insurance is only available for Tesla Car Owners, and there are no plans to change that.
The company says the reason it offers lower rates in the first place is because it “uniquely understands its vehicles” and their “technology, safety and repair costs”.
If you don’t have a Model S, Model X, Model 3, or Model Y, you’ll have to look elsewhere to find a deep car insurance discount.
And while Musk plans to one day offer his in-house insurance worldwide, you might have a bit of a wait depending on where you live.
“The regulatory process for insurance offer approval is extremely slow and complex, varying widely from state to state,” he wrote on Twitter last year.
Why You Might Switch to Tesla Insurance
Electric cars generally cost more to repair or replace than their gas-guzzling counterparts, and as luxury electric vehicle, Teslas can be even more expensive.
Motortrend has studied how much it would cost each year to insure the different models available from a traditional provider. Among other factors, these averages assume the owner is a single, 40-year-old male with a clean criminal record and a good credit rating:
Tesla Model 3: $2,114 – $2,351
Tesla Model S: $3,673 – $4,143
Tesla Model Y: $2,118 – $2,227
Tesla Model X: $3,355 – $4,025
An average driver could save between 20% and 40% by switching, Tesla says, while some drivers could save between 30% and 60%.
The company says it can charge less because it trusts its cars’ advanced safety features – and the driving data it harvests directly from your vehicle.
“Tesla uses specific features within the vehicle to assess your premium based on your actual driving,” Tesla said in a statement. “You’ll make monthly payments based on your driving behavior instead of traditional factors such as credit, age, gender, claims history and driving records used by other insurers.”
It’s a big change. Although many other insurers offer discounts if you install a tracking device and drive safely, they generally use this data next to your credit, claims history and other factors to decide your rates.
Finally, being held accountable for your behavior might force you to drive more carefully, even if it means getting to your destination a little slower.
“Having real-time feedback on driving habits actually allows Tesla owners to drive the cars more safely, because they can see…” OK, this affects my insurance rate, or it doesn’t. the case,'” Musk said in an April earnings call.
Why Some Might Ditch Tesla Insurance
Speed demons who have no desire to change may not appreciate that their insurer knows how they really behave behind the wheel, especially if they have enjoyed a good driving record or excellent credit.
Some drivers also avoid installing tracking devices for privacy reasons, although in this case it should be noted that the technology needed to use Tesla Insurance is already built into Tesla vehicles.
And while the company is enthusiastic about its use of data in most states where it operates, California laws prohibit insurers from using behavior tracking technology to set car insurance rates.
“We want to have the kind of real-time insurance where your insurance costs are based on your actual driving history, which is the right way to do it,” Musk said at a shareholder meeting the last year. “So we’re trying to get permission from regulators.”
At this time, Tesla does not use data from individual cars in California and instead relies on anonymous information drawn from a wide range of drivers. That means a Model Tesla driver in Cali will pay the same as a daredevil who makes hairpin turns and brakes at the last minute — assuming no one actually has an accident.
Tesla owners in the Golden State would be wise to compare quotes from multiple companies to make sure Tesla Insurance always offers the best rate.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.