AAA Raises Insurance Premiums For Tesla: High Claim Frequency, Costly Repairs

Tesla

JUN 5 2017 BY STEVEN LOVEDAY 60

Tesla Model X

Tesla Model X

It turns out Tesla’s forward thinking regarding the Insure My Tesla program may be a necessary step.

AAA Insurance company has decided that Tesla owners should be charged higher premiums for their car insurance. Apparently, their research has proven that the Silicon Valley electric automaker’s vehicles are expensive to repair (which isn’t surprising). The top ten most expensive cars to insure are premium luxury cars with high sticker prices and expensive repair costs. Russ Rader, spokesman for the Insurance Institute for Highway Safety, said:

Tesla Model 3

It will be interesting to see how rates fare for the upcoming Model 3.

“Teslas get into a lot of crashes and are costly to repair afterward. Consumers will pay for that when they go to insure one.”

AAA states that Tesla also shows unusually high claim frequencies when compared to with other cars in the same classes. This doesn’t necessarily mean that Tesla vehicles “break” more often, or get into more accidents. It does mean that Tesla owners want their cars in tip-top condition, which is also very representative of luxury car owners in general. When you pay top dollar for a vehicle, you don’t tend to leave it in disrepair, or with nicks or scrapes, and it’s likely that you can afford the deductible.

Based on data from the Highway Loss Data Institute, AAA may raise Tesla insurance rates as much as 30 percent. Tesla responded in a statement to Automotive News:

“This analysis is severely flawed and is not reflective of reality. Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon.”

AAA disagreed and said that it had seen the frequency discrepancy in its data, so it consulted the Highway Loss Data Institute for comparison. Anthony Ptasznik, AAA’s chief actuary, shared:

“Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates.”

The Tesla Model S competes in a class of luxury large sedans that includes vehicles like the Audi A6, Volvo XC70, BMW 5 Series, and Mercedes E-Class.

According to Tesla, the Highway Loss Data Institute’s system compared its vehicles to the wrong competing models to come up with its data. The electric automaker assures that if it had been compared to the correct vehicles, the “false and misleading” data would match the electric automaker’s own data. The automaker also reminded that according to the National Highway Traffic Safety Administration (NHTSA), the Model S has the lowest likelihood of injury in the class.

Nonetheless, according to the Institute’s findings, the Model S has a claim frequency of more than double the average, and repair costs that are 46 percent above the average.

In regards to the Model X, an automaker spokesperson asserted:

“We expect Model X to receive the best score for any SUV ever tested.”

AAA finds that the Model X has claims filed 41 percent more often than the average, and repairs cost a whopping 89 percent more than the average, according to the Institute.

Despite all of this, insurance companies are working on new ways to calculate premiums, and vehicle autonomy should play a part. An Ohio insurance startup called Root, bases insurance on driver behavior, which is monitored via a mobile phone app. Root CEO Alex Timm believes that self-driving tech should lower rates as well. Root gives Tesla drivers an additional discount due to the NHTSA’s findings that Autopilot’s Autosteer feature reduces crashes by 40 percent. He said:

“Insurance premiums should reflect risk. Autonomous vehicles are safer and will continue to get safer. It’s proven in the data.”

Soon, Tesla owners may not have to worry so much about shopping for insurance companies, or discrepancies in rates. A company spokesperson concluded:

“As part of the Insure My Tesla program, Tesla is working with leading insurers resulting in lower prices for Tesla insurance, not higher. These leading insurers also appreciate the added safety benefit of Autopilot.”

Source: Autonews

Categories: Tesla

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60 Comments on "AAA Raises Insurance Premiums For Tesla: High Claim Frequency, Costly Repairs"

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Alan

Tesla aiming for disruption in the Auto insurance market also.

If only they did Lawyers (Attorneys) & Estate Agents (Realtors) too.

Elon for President !

Kosh

They say there was certain moment (at a fundraiser) where Obama pissed off Trump enough to make him decide to run for president.

Maybe Elon reached that point with Trump on the Paris Agreement?

“Musk 2020”

MDEV

Musk wasn’t born in US hence can’t run for president. I wish though……

Tom

That never stopped Obama.

/ducks

Paul Smith

Musk is too busy doing real work for the whole planet.

ffbj

I think insurance companies can usually find ways to raise rates. The real cost in auto insurance are injuries and the related suits that evolve from such.
Tesla is one of the safest cars on the road. It should be the severity and number of personal injuries that make the most impact in higher rates and in that category Tesla is clearly superior.

Besides which saying a vehicle has “lots” of of accidents, lacks the specificity that one should expect from an insurance analyst.

zzzzzzzzzz

Injuries to others, not just to driver or passengers that may be covered by other medical insurance policy. I.e., liability insurance. Though costs of specialized $100k car repairs may add up a lot too in this case.

Current Tesla cars don’t even have proper automatic emergency braking now, that you can get with random econobox. Big mass and excessive acceleration attracting reckless drivers doesn’t help either.

Pushmi-Pullyu

Well, the respite from serial Tesla bashing was nice while it lasted, altho it wasn’t very long. I guess the anti-Tesla trolls found no point in wasting their time after exiting their Tesla “short” position.

But I see zzzzzzzzzzz, Four Electrics, and DonC are back to regurgitating their tired old FUD, and new serial Tesla basher “FISHEV” has joined them.

Have they all already bought back in to a new “short” position? Or do they have a different hidden agenda for posting FUD about Tesla? One thing is certain: They’ll never tell us what their real motive is!

sven ¯\_(ツ)_/¯

Well, the respite from serial ad hominem attacks by Tesla shill and apologist Poo-Poo was nice while it lasted, although it wasn’t very long.

Poo-Poo, how does Elon pay you Tesla shills/apologists, in cash or Tesla stock? ¯\_(ツ)_/¯

Pushmi-Pullyu

Let’s see: You post almost nothing but Tesla-bashing comments, motivated by greed and your desire to promote your Tesla stock “short” position.

I post on many or most subjects here, because I’m actually interested in EV tech and what it hopefully will do to end burning fossil fuels.

One of these things is not like the other.

Suggesting that everyone who posts here frequently is a shill, just because you are, is what passes for FUDster troll “logic”.

sven ¯\_(ツ)_/¯

Does Elon give you a W-2 or a 1099?

Bill Howland

Sven has bought a VOLT, and Trump has bought a Roadster. What have you done PUSHI other than claim MUSK was selling ‘fault-laden’ cars and not covering them under warranty.

When proven wrong you’ve never appologized. Or mentioned what the supposed fault(S) were.

Obviously you’re not even intelligent enough to specify EXACTLY what Musk’s supposed deception was.

Most of us here have supported EV’s by putting our money where our mouth is.

You seem to have nothing to contribute other than taking pot-shots at serious commenters who ARE advancing the cause of EV’s.

Since you are pretty much the only TESLA basher here PUSHI, perhaps, if your mirror can withstand it, you should look there on occasion.

Terawatt

All of them are throwing around characterisations, and none of them cite a single number.

What’s the claim rate for the Teslas? What is it for the cars each side claim to be comparable (and which cars are they)? What’s the insurance rate for the same sets of cars?

These are questions easy to answer if you have the data. Tesla claims their data shows one thing, AAA claims something else, but neither show us the data so we can judge for ourselves.

Knowing that the rate increases by 30% is pretty meaningless in itself. Was it relatively low or high to begin with?

How much better things would be if people used less adjectives and more numbers!

Zim

Did you read the article?

“Nonetheless, according to the Institute’s findings, the Model S has a claim frequency of more than double the average, and repair costs that are 46 percent above the average.”

Oswald

The full article does give the relative claim rate in their class.

“Collision damage claims for large luxury vehicles are reported 13 percent more frequently than average, and those claims cost about 50 percent higher than average, the Highway Loss Data Institute said. The rear-wheel-drive Tesla Model S is involved in 46 percent more claims than average, and those claims cost more than twice than average, it said.

In the large luxury SUV class, where collision coverage claim frequency is the same as the average for all vehicles and the cost of claims is 43 percent above average, the owners of the Model X file for claims 41 percent more often than average, and those claims cost 89 percent more than average, according to the institute.”

Four Electrics

Tesla’s response is its typical petty propaganda. It does not matter which “class” these cars are in. It only matters how much they cost to insure, as measured by claims. If the data is there, the data is there. It sounds like these cars, as new models with less history, have been receiving a discount that is now ending.

Insurance is fiercely competitive, and raising rates unnecessarily is a surefire way to lose customers. Those with the best models win.

If Tesla thinks they can do better, they should offer their own insurance.

ffbj

Well I guess great minds do think alike. Although some get there sooner.
https://www.thezebra.com/insurance-news/4098/tesla-opting-insure-cars/

pjwood1

It gets into a Pandora’s box, of Tesla severely limiting who has access to its car. Unless it is actually Tesla, the body shops are the only ones who get drive line instruction. Whatever the accident rate, they are tailor made for abusive shop pricing, since there is no competition away from the (approved) facilities being hundreds of miles apart.

Take a Tesla someplace else, and they won’t be able to buy parts, or turn the car back on. They’re so guarded (vertically integrated), places like this are where owning one can hurt.

Kdawg

What’s the approximate average insurance cost on a Model S today?

notting

“Autonomous vehicles are safer and will continue to get safer.”
No, in more complicated situtions, autonomous vehicles are giving steering back to the driver – which increases the risk in that moment enormously because the driver maybe looked at other things than the situation around him which may take a few seconds to realize all the things happening around him.

So in effect, autonomous vehicles are faking accident statistics by refusing to work in situations with higher accident risk (e.g. complicated lanes in construction sides, no lanes due to snow etc., …).

Additionally autonomous vehicles will make pedestrians and cyclist more uninterested concerning the traffic around them -> “The cars will brake automatically, so what should happen? So I can do what I what without considering the traffic, me first.” – and if they’re to close for the wheels to brake even with an incredible fast reaction of a computer -> accident -> and maybe the cyclist is even not affected, but somebody else, because the cyclist forced the computer to an decision who will be hurt…
Today it’s already worse enough… 🙁

notting

zzzzzzzzzz

“autonomous vehicles are giving steering back to the driver”

These are not autonomous but diver assist features. So far we just have fake “autonomy” existing in star eyed fanboy minds only.

unlucky

I agree about the statistics. Automatic driving is only driving the easy parts and and yet Tesla wants to compare stats straight across to humans who have to drive all the parts.

Poorly marked road? Human takes over. Very heavy weather? Human takes over. Controlled intersections? Human takes over. Roadwork? Human takes over.

Tesla does have the top self-driving in the world that I know of. But it’s still not time to compare stats straight across.

ffbj

But statistically most accidents are caused by inattentive driving, which usually means texting, or looking at their cell phones, so this is why auto-pilot is not only safer, but much safer.

Pushmi-Pullyu

notting said:

“…in more complicated situtions, autonomous vehicles are giving steering back to the driver – which increases the risk in that moment enormously…”

That sounds logical, but statistics show otherwise rather strongly. According to the NHTSA, Tesla Model S’s equipped AutoSteer have a nearly 41% lower accident rate than those without.

I find that different quite startling, given how new and relatively undeveloped Tesla’s self-steering feature is.

I suspect it won’t be long until other insurance companies do the exact opposite of what AAA has done, and lower rates for Tesla cars equipped with AutoSteer.

Doggydogworld

It’s not always clear from the excerpts quoted in articles, but the reduction mostly comes from AEB. FWIW, 40% is a pretty standard number for AEB.

Pushmi-Pullyu

I respectfully disagree. Unless you can give an authoritative citation, I’m going to stick with my assertion, which is based on what the NHTSA reported as actual statistics of actual accident reports.

What you are talking about, I’m guessing, is this bit from a NHTSA report (link below):

IIHS research shows that AEB systems meeting the commitment would reduce
rear-end crashes [emphasis added] by 40 percent.

That’s a long way from reducing the overall accident rate by, as the NHTSA put it, “almost 41 percent”.

https://static.nhtsa.gov/odi/inv/2016/INCLA-PE16007-7876.PDF

unlucky

The stat was that cars equipped with autosteer have a much lower crash rate even when autosteer isn’t used.

If you look at that and find some way in your head to attribute that to autosteer you are have seriously deficient thinking.

There has to be an answer that makes sense. Attributing the reduction to Tesla’s self-driving isn’t it. It might be auto braking. It might be a demographic difference. There’s a lot of things it could be.

When you read reports of $20k repair costs for fender benders, this is no surprise at all.

georgeS

how much is the ins. on your BoltEV?

About $50 a year more than my ’12 Volt.
Pretty much exact same coverage for both, except I have extra glass coverage for the Bolt.

DonC

Naturally the repair costs are high but the big story here is the frequency. Having a frequency twice the average means Tesla drivers are getting into twice as many accidents. Could be something wrong with the cars, something wrong with the drivers (old and feeble, jerks), or, as Elon might claim, something wrong with other drivers who, consumed with envy, are running into Teslas at an astounding rate.

georgeS

“something wrong with the drivers (old and feeble”

Please DonC, no need to get personal:)

georgeS

Just read the article and I don’t see a number in dollars of how much insurance costs for the Model S.

FYI

My 2012 is 90$/month. 1000$ deductible. I’m 68 with a good driving record.

Mark.ca

That is exactly what i pay for my ’13 Lexus es300h (wife car) but I’m 30 years younger with excellent driving record so considering that your car is more expensive your insurance rates are quite low.

georgeS

kdawg

I don’t have an average number but my 2012 MS is 90$/mo with 1000$ ded. I’m 68 and have a good driving record.

Hey DonC .

How much is your ELR???

Hey kdawg how much is your Volt?

Kdawg

I pay $373 for 6 months, so $62/mo. My deductible is also $1000.

ModernMarvelFan

My 2012 Volt cost $562/6month or $94/month.

Deductible is $200/collison and $25/comprehensive. 18k miles/year in California with a good driving record and 40+ years old. Coverage is $500K/250k.

SSL

My Volt was $60 a month with $250 deductible. I am 64 with a good driving record.

JR

I pay about $110 a month for my 85D (DK). I am 50, no damage in last 15 years

Nix

I find it interesting that there is absolutely no mention of bodily injury costs.

Considering that bodily injury/loss of life claims can quickly reach into the hundreds of thousands of dollars (or even millions), while auto losses are capped at the book value of the vehicle minus salvage value of the wrecked car, I can’t see how they could set rates without even considering those sorts of losses.

unlucky

Just because it isn’t mentioned doesn’t mean they didn’t consider them. They’re an insurance company. They do actually know their business.

The source article mentions collision coverage. It’s quite likely this is only speaking of the collision portion of your coverage, not the injury portion.

Nix

AAA is also a lobbyist organization, who has a long history of lobbying against green issues, like the Clean Air Act. They have also opposed environmental impact studies, lobbied in support of Keystone XL, opposed the moratorium on deep water drilling after the Gulf Deepwater Horizon disaster, etc

http://www.alternet.org/story/88361/did_you_know_aaa_is_bad_for_the_environment_but_you_can_get_green_roadside_assistance

So no, they aren’t just an insurance company with no agenda. They are a pro-oil industry group that advocates for the use of gas powered automobiles.

If that is the mast you want to lash yourself to, don’t let me stop you.

unlucky

alternet. Okay. You’re using the “you can find anything on the internet” method of explaining this I see.

Insurance companies actually know their business. They don’t stay afloat by not doing proper actuarial work.

DJ

This isn’t really a surprise. A windshield on the X costs what $1,500 + to repair meanwhile on a more affordable car it’s $500 (or less).

Mark.ca

There rates should be lower on M3 since the body will not be made of aluminum which brings the repair cost up…not to mention the lower cost base. Judging by the 2 posters here that posted the Ms insurance rates i think these are very reasonable for a luxury sedan….actually i think they are cheap.

Fabian

I think you will slowly find that most of the insurance companies are in collusion and will slowly raise rates for anything with a TESLA brand on it because of this, just because they can get away with it.

They will ‘assume’ that the Model-3 will have similar repair costs, and maybe after a few years, it might begin to drop for the M3, if you are lucky and they honest, which they are not, so don’t hold your breath.

Goofcat

I think we are focusing too much on the cost per accident repair. AAA seems to be indicating that increased frequency of accidents is their reason for the rate change.

I would like to know the causation for this higher than average accident rate.

Pushmi-Pullyu

Goofcat said:

“I would like to know the causation for this higher than average accident rate.”

A higher accident rate is typical for high performance cars. People who buy high performance cars tend to drive them faster and sometimes recklessly. It’s not that the Models S & X are unsafe — in fact, their crash test ratings are top-notch. It’s that there is a greater correlation between high performance cars and unsafe driving.

Tesla’s constant advertising of lower and lower 0-60 times certainly must attract a higher percentage of “speed demons” to the car.

unlucky

On the contrary I do think Teslas “crash” more often. They have two things really working against them.

The first is that they have a lot of older customers. They are eating up the customer base of the 7 Series and S-Class and those are older people.

The second is that the car is huge. Of the young people who buy them, it’s usually the largest car they’ve ever owned (on the outside). And I know multiple people who have scraped up their cars soon after buying them because they aren’t used to driving a car that large.

So I don’t necessarily believe that the reasons for more claims are just nitpicky customers.

The other big reason for the high costs is that it really is expensive to fix. Between using aluminum on the body and Tesla not opening up their body shop program to enough places quickly enough (a problem they are working on right now) the prices of work on Teslas is high. Even for a $100K car.

Of course Tesla is having any of this. Somehow they think they can defy math too. They always believe everything said about them that isn’t positive is a lie.

FISHEV

The fast acceleration for which maybe 25% of Tesla customers buy the car. Cars driven aggressively typically have higher accident rates.

FISHEV

It does boost the price of the Model 3 by $7,000 to get the full 100,000 mile warranty and service. It’s not a car that you can serviced or fixed anywhere but Tesla.

Model 3 base delivered $36,200
Autopilot $5,000
70 kWh battery $10,000
AWD $5,000
Paint $1,000
Warranty/Service $7,000
SubZero $1,000

Total Net $65,200

Pretty much the “smaller Model S” that Musk says we should not “expect”.

Mark.ca

Now take all these options and put them in the base model S and see if you can stay under 90k. The idea is that these 2 models with same options will have a price difference of about $30k…for some reason you struggle understanding this. You want me to draw it for you?

FISHEV

“The idea is that these 2 models with same options will have a price difference of about $30k…for some reason you struggle understanding this.”

You seem to struggle understanding I was the one who just pointed out the $30K price difference. But you missed the main point, Musk said we should not expect a smaller version of the Model S but that is exactly what we do want. A Model S that’s $30K cheaper and smaller.

With those, what I would call base options, the Model 3 is a $65K mini-S.

Mark.ca

So you don’t have these options in the car you are driving but still call them “base options” for M3….got it. You have so twisted way of thinking.

Bill Howland

This is somewhat troubling:

30, or 41% higher frequency of collisions?

89% (!!!) increased cost to repair?

My insurance premium only went up $2 a month with the ‘luxury ELR’, of course, I don’t pay for Collision or Comprehensive on the car so my insurance costs are obviously much lower than average.

But the question remains, why are Tesla owners in general getting in so many collisions?

Pushmi-Pullyu

Hmmm, I would expect news like this to affect Tesla’s stock price in a negative way. But checking on that, I see the price is actually up today.

Perhaps the market sees AAA’s change in rating as an outlier, and not the sign of a trend? If I understand what the article is saying, there seems to be a lack of consensus on this issue.

Or maybe the market “sees” some recent good news about Tesla that outweighs this bad news.

Mark

Lol!!! Stop complaining! If you can afford a Model S or a Model X than I would raise the insurance rates on you rich 1 percenters as well! You are going to pay the higher rates regardless. You might complain but you will still pay because you can afford to do so. The bottom line is the average person cannot afford a 70k plus vehicle. So the hell with you wealthy bastards!!!!!!!

Rob

Cannot help, but think the focus/motives of this article and it’s timing all seem suspect.

When I checked with my auto insurance company a few weeks ago, to see what Model 3 would do to my rates, she hadn’t even heard of it.

Her next question was, “What is the value of the car?” Based on that information, the what-if’s of which vehicles were would keep and get rid of, combined with my driving record.

She had a rate for me in 30 seconds flat… The way it should be.

My Model X premium is way less than my Porsche Panamera 4S premium. Some insurance companies charge more than others so you must shop around.

High performance luxury cars are more to insure! It is easy to total a less expensive car but luxury cars are usually repaired so are costly! My Porsche Panamera 4S has a higher premium than my Model X even though around the same MSRP! Even though Tesla is the safest car that should count for something!