One of the most significant downsides to owning a Tesla (besides other people knowing you gave Elon Musk money) is that they can be expensive to fix after a wreck.
As a result, your Model Y may end up totaled, even if the damage looks minor and the miles are low. Insurance companies also charge premiums for Tesla and other electric vehicles.
Tesla Insurance was supposed to solve this problem for owners, but if you drive at night, it may not end up as it initially seems.
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The Drive reports that since Tesla Insurance monitors everything you do while driving, it also knows the time of day you are driving and will penalize owners for driving at night. The more you drive between 10 pm and 4 am, the more you pay.
At first glance, this may sound ridiculous, especially to otherwise safe drivers. But other insurance companies that offer discounts in exchange for monitoring drivers have similar policies. As The Drive points out, most fatal car wrecks happen at night.
If you drive late at night, no matter how safe a driver you are, it makes sense that the insurance company won't give you that big of a discount. Especially since in many places it's 2 am when the bars close, the likelihood of drunk drivers on the road is higher.
It might not be ideal for people who come home late or have to leave early for work, but it makes sense why Tesla Insurance would charge those drivers a little extra. Car insurance is a business like any other.
Short answer: It depends.
Tesla Insurance is only offered in a few states now. California is first. Depending on the state, rates may or may not be competitive.
Tesla is still new to the insurance game - without a large number of subscribers, it's hard to balance the risk of payouts. As more customers get Tesla insurance, the pool will grow, allowing Tesla to balance risk more and offer lower rates.
For now, Tesla only offers car insurance. Many other companies offer property insurance and offer discounts for bundling many types of policies together because it reduces risk. Tesla may offer more types of insurance to reduce risk in the future.
l drivers. The risk associated with driving is accurate for the general population, but determining the risk for an individual driver is more difficult. Tesla has the ability to record how a driver drives, but there are privacy issues.
Will drivers want Tesla to track all their habits for a lower rate? Some insurance companies already track individual cars using a voluntary key and provide discounts based on this data. Tesla may even be able to slow you down based on the actual time it's sitting in your driveway.
Tesla could subsidize insurance as part of a larger electric ecosystem package. With Vehicle to Grid and Autobidder, Tesla could make money by buying and selling electricity using your Tesla as a giant battery.
Combined with the fact that your Tesla isn't moving when it's charging, it's less likely to crash. So Tesla can offer a discount on insurance by combining it with an offer to use it as a battery.
Daily/hourly subscription. Part of the difficulty in determining risk is the short time horizons. Accidents tend to settle over time, so most policies are offered on a yearly, semi-annual, or quarterly basis. Prices for a short period, such as a month, are usually higher.
If Tesla has detailed records of drivers, it could offer insurance by the day or even by the hour based on the driver's instantaneous habits. Then you'd only pay for insurance for the time you actually drive—at a higher hourly rate, but less if you don't drive many hours a day.
Personal use vs. the Tesla network. Tesla plans to offer Tesla insurance for Tesla's operation in the Tesla network (driving/robot axis). Rates may be higher when in service to drive others due to higher liability.
Rates may also depend on whether you are driving, on autopilot, or using FSD. Again, this can vary as often as hourly depending on how much data Tesla collects.
Finally, Tesla Insurance may not be profitable. As part of a larger ecosystem, Tesla can offer loss insurance if it brings in revenue in other areas such as Tesla Network, Tesla Autobidder, etc.
This means it can price to be more competitive with other insurance offerings without worrying about profit. Like the cost of building and maintaining the Supercharger network. expensive but worth it in customer trust for charging and brand recognition.
Why should you buy a Tesla and get Tesla insurance?
The original question was, “Why should you buy a Tesla and get Tesla insurance?
These are actually two questions about two different products.
Tesla currently produces four series of BEVs; Model S, Model 3, Model X, and Model Y. Also by spelling "sexy" with an inverted "e," they line up luxury sedan, midsize-but-still-great sedan, luxury crossover SUV, and midsize SUV-but-still-great crossover.
Assess your own needs and income against car prices and, above all, your ability to live with a BEV. Not everyone can live with a BEV, even if they can afford to buy or lease one. You might be happier with a Chevy Bolt, Hyundai Kona, Porsche Taycan, and so on; or another ICE vehicle.
Tesla Insurance is auto insurance offered by Tesla in many but not all US states. because Tesla offers it doesn't mean they will be better or worse than any other insurance provider for your Tesla. I'm not an insurance agent and I don't play one on TV; so do your own due diligence.
But, after the initial launch of the policy, Tesla Insurance uses the data that all Tesla vehicles send back to Tesla to set your premium; and they currently insure only Teslas.
So not only can you not charge your Harley-Davidson LiveWire ONE at a Tesla Supercharger, but you also can't insure it with them. But at least they haven't bought a Supreme Court justice (yet).
This concept should offer many learning opportunities.
Summary statement:
Many technology firms with high intelligence, excellent support, and management are trying to innovate beyond their original golden goose.
Uber, which has done nothing but be successful at selling 50-cent dollar bills… for 11 years and counting, has decided to deliver food. So Uber doesn't even have a golden goose to lean on while Uber isn't making any money off of it.
I will not go down the list. Being smart and rich doesn't mean you're right. You step up to the plate and take a swing at guys who… aren't.
Tesla has a data feed and fan base that should allow for effective car insurance. If you eat while driving your Model 3, they'll know. If your Airedale Fritzy rides in the passenger seat and barks at other dogs?
They will know. If your daughter goes to the same lounge from the wedding until 7 pm on Friday… they will know. If, sir, you slow down on the beach in Santa Monica and admire the ladies in their swimsuits? They will know.
But you shouldn't feel scared, right? Facebook and Google on your smartphone follow you into a public restroom, right? They know what you ate last night and who you were with...right?
We'll save you $48 a month and know everything you're doing when you're around or in your car.
Back to the point.
Tesla is a car company. Their cars are homemade crazy runs. They are owned by a bazillionaire rockstar technology who tells the Martians what to do and the Martians respond…” Yes sir”.
The only limit Tesla has is that they are exclusive. $38,000 and up is Tesla territory. They are not for everyone.
Is Tesla Motors a financial success? Somehow. Does he have a chance to be one? Yes.
Is insurance another business?
Yes.
History has provided us with examples of large companies "entering into new business." Yes.
We've all read the press releases where the big companies said they were "getting out of this other business and sticking to our roots." Yes.
When you slap your Tesla, is the body shop experience good? No.
Does Tesla have a stock of repair parts at the body shop? No.
Is your average Tesla a rather complex and expensive car? Yes.
Do the above factors contribute to repair costs? Yes.
Can brains, technology, and money solve our car insurance system? Why the hell not?
Will a bunch of expensive cars with exploding batteries and a non-existent parts supply channel generate revenue for Tesla Insurance and thus save money for Tesla policyholders? Go for it.
In the 1970s, we had a saying in gastronomy…
"The bank doesn't sell hamburgers and we don't cash checks."
What is Tesla Insurance?
How does Tesla insurance work?
Tesla Insurance and how it will crush the Industry
Tesla fascinated the world with its cool and fast electric cars. Now it wants to disrupt a related industry: insurance. Tesla has been selling car insurance for the past few years. But it won't be quiet for long. CEO Elon Musk believes insurance will one day make up a third of Tesla's business. It will be much more convincing than anything else. It will cost less and be better, so why not?
How Tesla Insurance Will Crush the Industry?
Tesla started selling car insurance in California in 2019, and claims drivers can reduce their insurance costs by up to 20% or 30%. Data compiled by the personal finance website ValuePenguin shows that Tesla insurance isn't the cheapest in California, but it's among the cheapest.
It's said to be the least expensive plan in Texas, where Tesla has a lot going on. A new Gigafactory is being built near Austin. And Musk moved to the Lonestar State to be closer to SpaceX's Starship rocket facility. State regulators there reportedly approved rates and policies for Tesla Insurance, which averages $1,795, according to data compiled by ValuePenguin.
Individual rates vary depending on your driving record, age, the coverage you choose, and the Tesla you buy. The Model Y mid-size SUV is the cheapest to insure. And if you take the Model S, prices could be more expensive for the Plaid, which goes from 0 to 100 in 2.1 seconds compared to the long-range version's 3.2 seconds.
Why can Tesla afford to offer lower insurance rates?
He says this will drop fees charged by traditional insurance carriers. Examples of fees are commissions paid to insurance brokers. More, Tesla claims that no one knows more about Tesla than Tesla.
While other insurance companies set their insurance rates based on their own risk assessment, which could be inflated because the technology is so new, Tesla believes that only it knows the cars well enough to determine fair rates.
An insane amount of data collected from its cars tracks how fast you're going, how many times the lane departure warning goes off, and whether you're in ridiculous mode or even faster-checkered mode.
Although Tesla says it shares driving data with other insurers – it believes it “…understands its vehicles, technology, safety, and repair costs”.
How does Tesla use personal insurance driving data?
At this point, Tesla says it doesn't use your personal driving data to determine insurance rates, but that will almost change in the future. Musk hinted at that. If they want to buy Tesla insurance, they have to agree not to drive the car in a crazy way. Or they can, but then the insurance rates are higher.
Toyota has already tested it. It has partnered with insurance company Progressive to begin tracking driving behavior in Toyotas with connected technology to offer discounts. There is a lot of room for discounts when it comes to electric vehicles. It was found that a typical insurance company prices electric cars 23% more than the gas equal, due to the expensive cost of repairing them.
How will Tesla change the insurance industry?
A few years ago, a writer for CleanTechnica described clipping a parking sign on his Model 3, and the repair bill was a staggering $7,000. A large part of this was labor costs due to the technology in the car: sensors had to be recalibrated and battery connectors had to be disconnected.
Tesla thinks it has an advantage here, too. The company claims that its own service centers can work four times faster than conventional ones. The number of Tesla repair centers is growing. And the goal is reportedly to open one new store every week in 2021.
But, Tesla wants to make its vehicles so reliable that you won't need to visit a service center.
Tesla believes its self-driving software, called Full Self-Driving, or FSD, will make its cars safer and less prone to accidents.
This is the software Tesla hopes will take its cars from Level 2 autonomy, in which the driver must be ready to steer, to Level 5, in which the driver doesn't have to pay any attention at all. Tesla will even offer insurance discounts for those who use their driver-help systems.
If Teslas are able to drive themselves, that doesn't mean accidents won't happen. Technology can fail or people can't use it.
So how on earth will other insurance companies assess risk?
It will get easier over time as more data comes in to better inform companies about price risk in line with reality. But they may struggle to catch up with Tesla, which is now struggling to offer coverage in Texas, Illinois, and Washington. The goal is nationwide coverage and one day worldwide.
It's clear that Tesla wants to offer consumers the complete package. Apple has done this by creating an ecosystem where its devices are designed to work together, enticing you to buy them all. Tesla is now trying to build its own ecosystem where your house has a Tesla solar roof that generates energy that can be stored in a Tesla power wall that can power your home at night or during an outage.
Why is Tesla at an advantage?
How does Tesla insurance work?
Tesla fascinated the world with its cool and fast electric cars. Now it wants to disrupt a related industry: insurance. Tesla has been selling car insurance for the past few years. But it won't be quiet for long.
CEO Elon Musk believes insurance will one day account for a third
Is Tesla expensive to repair? Why is Tesla insurance so expensive?
From my research before purchasing our European Model 3, I have come to the conclusion that the Tesla Model S and X are indeed quite expensive to repair and often take longer to repair than other brands, and repairs take longer due to longer lead times for parts.
These models are made of aluminum and the parts are expensive and more difficult to repair. Also, from what I've seen, insurance companies are more likely to declare a car with any battery damage a total loss.
The 3 and Y models are all built using steel body panels and repair or replacement seems to be much more comparable to traditional car parts availability is improving as their market penetration increases.
This is reflected in the very reasonable premium I pay for my Model 3. That's a bit more expensive than my old Volvo xc70, but it should be noted that the Model 3 has more than double the power and triple the acceleration. Compared to high-performance cars from other brands, this car is very cheap to insure here in France.
It should be said that I obtained my insurance through a Tesla affiliate.
That Tesla insurance will be a lot cheaper once "full self-driving" gets closer to "full functionality", but it's worth noting that the camera systems (9 of them, including the one in the car) will allow insurers to see every aspect of the accident very and reduce "disputed" claims and payouts, further reducing their exposure to risk and potential insurance costs for owners.
How much does Tesla insurance cost per month?
Tesla can be a bit more expensive than other cars because they are more expensive to repair. Tesla has a very tight grip on repairs, although several independent repair shops are popping up in various locations. One of the reasons is that Tesla has a very high voltage in the parts of the car.
If you don't know what you're doing, it can end. As another person mentioned, insurance costs vary depending on many factors, including driving record, previous damage, and if you have discounts such as many policies. It also depends on how high your deductible is.
It can range from $100/month to over $250/month for some people I've heard. A lot also depends on the model, year, and buy price. A 2021 Model S or X with a $100,000+ price tag will insure a used Model S for over $30,000.
My suggestion would be to call your insurance agent with information about the car you want to buy. They can give you an accurate quote. It doesn't cost anything to ask them and it will help you plan your car budget. Keep in mind that while some costs, such as insurance, may be higher, other costs, such as fuel and maintenance, will be lower.
What does Tesla insurance mean for the future of auto insurance?
While Tesla is in a position to make a lot of money on the ship. Tesla insurance means nothing to the auto insurance industry. In the short term, Tesla will be able to reduce the cost of insuring Tesla vehicles.
If you have all scratched Porsche with Toyota and Toyota driver prices tend to go hire. The same thing happens to regular car drivers when they step on a Tesla. , with the data that Tesla collects, they have better tools to better protect the interests of customers.
But Tesla accounts for 2% of new car sales. If the share of new cars did not increase over the next 20 years and they insured all vehicles, Tesla would rank as the 9th largest insurance company. That would put them right below Farmers and the whole country, and well above American Family Insurance Group and Travelers.
Finally, car companies can bring their own data to the table. VW has partnered with Microsoft to get data into the cloud. Even if VW doesn't get into the insurance industry. They will sell access to this data to insurance companies.
This is how it will play. In the case of a small binder, most of the time no one can determine who is to blame. and the error percentage ended up being 50/50 or skewed to the person with the crappy coverage.
Tesla has 8 cameras and when a collision is detected they upload that data to Tesla insurance for your protection. Insurance Tesla decides on X insurance and finds out the percentage of the defect. With data and video in hand, Tesla wins more often than Insurance X without data.
Insurance X will start treating Tesla owners like Porsche owners and everyone else like Toyota owners. VW announces that the same kind of accident data and video can be made available to insurance company X for a fee.
Insurance X will buy data and VW drivers with the feature will get the same benefits as a Tesla driver. Rinse and repeat with other companies.
Everyone will have the same kind of features available and insurance will once again become a level playing field.
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