Let’s Talk Tesla
Are you considering Elon Musk’s recently developed insurance program for your Tesla? You may want to keep reading. “Because Tesla knows its vehicles best, Tesla Insurance is able to leverage the advanced technology, safety, and serviceability of our cars to provide insurance at a lower cost,” said the electric carmaker in a company blog post. “The data is there, it’s all there, cameras in and all-around your car, all of the data points are there,” Matthew Edmonds, Tesla’s Head of Insurance, said at an auto insurance conference in Chicago.
As a risk advisor to individuals and families, I have a few questions and concerns regarding Tesla’s initial rates, marketing strategies, and overall coverage. Tesla plans to use your GPS, vehicle cameras, and your internal computer system to determine your insurance rates. If the company knows your exact driving habits down to the millisecond, do you think your rates would be lower? #BIGBROTHER
With Tesla just entering the insurance market, how will their financial strength stack up? Will they be around to settle large-tail claims? (Claims with a long duration over months or years while still being settled in court) Is there a conflict of interest between an auto maker’s product liability and driver’s liability? For example, if the self-driving car fails and causes an accident, which policy would pay? Does Tesla’s familiarity with the vehicle change the fact that there is a shortage of repair parts and considerably longer delivery times? Your Tesla may be in the shop for months while they manufacture what is needed for your vehicle.
What are the rental car options, and will Tesla impose time limitations? Teslas take a notoriously long time to repair. Will Tesla employ its own claims adjuster s and, if so, will there only be a limited number of them? An insurance carrier’s reputation can be made or broken with the claims experience. Do they offer high enough liability limits for you, your exposure and what you can(‘t) afford to lose?
Will your umbrella or excess liability policy sit over this auto policy? Will you have an insurance advisor to help navigate questions and scenarios or will you be talking to a computer/automated system? What happens if the other vehicles in your household aren’t Teslas? If you total a Tesla, will they settle the loss based on an agreed value to protect your investment, OR—based on product depreciation?
Whether you currently have a Tesla, or are intrigued by their allure, let’s talk about why an independent risk advisor that caters to affluent clientele is still the best option!