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    Tesla's New Auto Insurance Service Get Mixed Reviews From Vehicle Owners - The Drive

    Some Tesla owners claim insurance rates are up to 50 percent higher than those from regular insurance companies.

    via Tesla

    Electric automaker Telsa has begun offering auto insurance to some customers in the United States with the launch of Tesla Insurance earlier this week. As the name might imply, the service is meant to exclusively insure Tesla-branded vehicles for customers actively living and driving in California with the goal of providing customers with more affordable insurance options.

    According to Tesla's website, insurers will be able to save between 20 and 30 percent on their premiums when using Tesla's insurance product versus a traditional auto insurer. Tesla says that it is able to achieve lower pricing thanks to its "direct knowledge" of drivers' habits, adjusting policy pricing based on the assessed risk of the person behind the wheel. As CEO Elon Musk puts it, if you drive in a "crazy way", the rate may be higher than someone who drives much more conservatively.

    Musk had originally publicized Tesla's venture into the insurance industry during Tesla's quarterly earnings call in April, announcing that the offering would be launched "in about a month" and advertising the service as being significantly "more compelling" than any other offering on the market. However, some customers would disagree.

    When the insurance program first went live this week, prices were less than competitive. A thread on Reddit began to crowdsource data on pricing and discovered that the average premium actually increased 65 percent when quoted by Tesla. In fact, of the 58 responses in the thread which contained financial data, only 10 individuals reported policy decreases while 30 reported increases of more than 50 percent.

    Shortly thereafter, Tesla announced that it would be updating the algorithm used to calculate premiums.

    A new Reddit thread seems to be much more positive towards Tesla's new insurance product. Some drivers reported savings of up to 52 percent, while others found themselves still quoted at a significantly higher price. Overall, the data provided in the thread suggests that Tesla's algorithm update dropped the automaker's previously quoted rate by an average of 46 percent.

    via California Department of Insurance

    Coverage is currently limited to drivers in California, but Tesla plans to roll out its insurance services to other states in the future. Eventually, any customer who purchases a brand new Tesla will be able to request an insurance quote directly from the automaker during the ordering process of their brand new car.

    "The price dropped by half but I noticed the property damage coverage lowered a bit and the collision and comprehensive deductibles were set at an eye-watering $2,000," wrote a Reddit user after recalculating their pricing. "After adjusting those to match my current coverage, end result was about the same rate as my current carrier. It’s nice to have choice in case my rate gets jacked up but not very groundbreaking."

    According to a filing with the California Department of Insurance, Tesla Insurance Services may also offer customers a discount on their premiums as the automaker further develops its semi-autonomous driving software, Autopilot. While it appears that standard Autopilot features will only net customers a small discount, drivers who purchase the automaker's Full Self-Driving suite may eventually be credited higher savings using a rewards scale based loosely off of the SAE's definition of autonomy levels.


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