Direct Line, the largest car insurer in the UK, is going to offer a 5% discount for Tesla electric cars (some 4,500 on British roads) with Autopilot feature, which lowers the crash rates (by 40%, according to NHTSA).
It's not clear whether the discount is available for all Autopilot-enabled cars, or if there needs to be certain percentage of driving on Autopilot to qualify. In fact, as it stands today, Autopilot isn't usable in a lot of situations, so we're not sure how this is going to be sorted out by the insurer.
Direct Line is working with Tesla to use the promotion as a learning tool to define how much Autopilot will influence claim rates.
"Direct Line said it was too early to say whether the use of the autopilot system produced a safety record that justified lower premiums. It said it was charging less to encourage use of the system and aid research."
"Direct Line sells insurance policies to customers introduced to it by Tesla. Tesla then provides information on the features and capabilities of its vehicles to help Direct Line set insurance prices."
Dan Freedman, Head of Motor Development at Direct Line said:
“At present the driver is firmly in charge so it’s just like insuring other cars, but it does offer Direct Line a great opportunity to learn and prepare for the future.”
Earlier this year, U.S. company Root Insurance announced up to a 12% discount for Tesla due to Autopilot's increased safety. In the case of Root, the discount is coupled with the percent of Autopilot miles driven.
Press release from Root:
Root Insurance Becomes The First Insurance Company to Offer Discounts To Drivers of Self-Driving Cars
Tesla® Drivers Can Now Earn up to 12% off Insurance Rates Due to Increased Safety of Autopilot.
Root Insurance, the first insurance company founded on the principle of fundamental fairness, today announced a new program for Tesla owners that gives a discount for the increased safety of semi-autonomous vehicles—or self-driving cars.
Root is the first car insurance company to offer such a discount. Starting today, the new discount is available to Tesla drivers with Autopilot, but soon will be available to everyone with a self-driving car. To qualify, drivers must first download the Root app and take a test drive.
Self-driving technology has proven to significantly reduce crash risk. For example, the crash rate of Tesla vehicles plummeted almost 40% after Autopilot became available, according to a recent report from the National Highway Traffic Safety Administration. Falling crash rates means the insurance industry should adjust their models to account for safer driving habits. But none of them have—until now.
“Self-driving cars are making our roads safer, and that means less risk and less expense for everyone,” said Alex Timm, CEO of Root. “It’s only fair to pass those savings along to the customers who invest in those self-driving cars.”
Using artificial intelligence, Root is able to adjust risk by factoring in the increased safety of self-driving miles. To calculate the new discount, Root’s app measures Autosteer-eligible highway miles driven during a test drive. Then a tiered discount is applied—the higher the percent of highway miles driven, the higher the discount.
“The car insurance industry is woefully out of date, which is why you pretty much only see flashy marketing campaigns and pricing gimmicks,” said Dan Manges, CTO of Root. “At Root, we’re using technology to reinvent insurance from the ground up to make the whole experience easier and fairer for our customers. Our new discount for self-driving cars is just one of many cutting-edge things still to come.”
To join Root, drivers simply download the app and take a test drive, which takes approximately two or three weeks. Once the test drive is complete, Root provides a quote that rewards good driving behavior and allows customers to switch their insurance policy—all through their mobile phone.
Root is currently available in Ohio and will be coming to more states soon. For more updates, please follow Root’s blog.