Tesla’s discounted insurance program drives into a few early potholes

Tesla rolled out a new type of insurance for its car owners, but things didn’t go as planned.

August 30, 2019

Tesla just announced the launch of Tesla Insurance: Tesla owners in California now can sign up for rates between 20% and 30% lower than those offered by traditional carriers.

But when Tesla owners tried to access the new site earlier this week, some people reported that the site was broken and others reported prices way higher than they had been promised.

Put it in reverse: Why is Tesla offering insurance?

Tesla owners need a break, too. Their electric cars’ advanced systems require specialized repairs, which drives up the cost of insuring those bad boys by as much as $3k annually.

But those advanced systems provide valuable information about individual driver behavior, which will help determine the risk profile. 

When teasing to the service back in April, Elon Musk had this to say: “[I]f they want to buy Tesla insurance, they would have to agree to not drive the car in a crazy way. Or they can, but then their insurance rates are higher.”

Mind your own business, Elon

Tesla says it doesn’t record vehicle data like GPS or vehicle camera footage when pricing insurance. 

Eventually, when its website is firing on all cylinders, Tesla Insurance will roll out in additional states (though Tesla did not say when). It also plans to expand options for people who use their cars for ridesharing services like Lyft and Uber — hey, even Tesla owners gotta chase the paper.

And as long as there aren’t too many claims to pay out, Tesla should be padding its margins, too.

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