Tesla Hopes To Bundle Insurance Into Purchase Of S, X & 3
Tesla has developed a knack for “doing it all,” so it was really only a matter of time before we would hear of the company’s auto insurance pursuits.
Jeff Evanson, Tesla Vice President of Global Investor Relations, revealed during Tesla’s fourth-quarter earnings call, that Tesla is planning to offer vehicle customized insurance policies for the Model S, X, and upcoming 3. He shared (via Teslarati):
“We’ve been doing it quietly, but in Asia in particular where we started this, now the majority of Tesla cars are sold with an insurance product that is customized to Tesla, that takes into account not only the Autopilot safety features but also the maintenance costs of the car. It’s our vision in the future that we’ll be able to offer a single price for the car, maintenance and insurance in a really compelling offering for the consumer. And we’re currently doing that today.”
The insurance policies being offered in Asia are more geared to maintenance at this point, but that won’t likely remain the case as the electric automaker moves forward. Tesla was lauded by the National Highway Transportation Safety Administration after the agency concluded its report regarding a fatal crash linked to Tesla’s Autopilot system. The administration didn’t find the automaker at fault, and actually concluded:
“Tesla vehicles crash rate dropped by almost 40% after Autosteer installation.”
As self-driving vehicles come upon us, at an even quicker rate then previously anticipated, many questions arise related to insurance. Will some companies refuse to insure cars being driven by software? Will insurance be more expensive until there is more research and proof concerning their safety? Will insurance be cheaper, due to the removal of human error? Who gets blamed if the car injures or kills someone? How will the car decide what is right and wrong?
No one really knows how any of this will pan out, so it is a fantastic concept for Tesla to furnish its own insurance. It also adds to Tesla’s “total package” mentality. One would think, that the company believes in itself and its technology more that some independent insurer, so it should save drivers money. CEO Elon Musk confirmed from the Q4 call:
“This is not to the exclusion of insurance providers if we find that insurance providers are not matching the insurance proportionate to the risk of the car. If we need to we’ll in-source it, but I think we’ll find that our insurance partners do adjust rates proportionate to the risk of a Tesla.”
Tesla has already caused quite a bit of market stir with its unique tactics. The fact that it sells its vehicles directly, without a franchise dealer, is being dealt with in courts throughout the country. If the company follows the Asian model and includes “maintenance” insurance in the equation, it will upset the status quo even further.
Regardless of how any of this impacts other automakers, Tesla is doing everything that it can to put customers first, and that really is where any company’s priorities should be.