Over the last several years, Tesla has started to roll out its insurance policies in a few U.S. states as an additional component of its expanding ecosystem. Tesla Insurance, which is still in its infancy, may be essential to maintaining cheap rates and high levels of driver safety, according to several of the automaker’s officials who have discussed it recently.
In a recent All-In Podcast last month, Tesla CEO Elon Musk spoke on the automaker’s new insurance policies, according to Bloomberg. Musk discussed using real-time driving data to calculate safety ratings during the meeting, a move that reduces Tesla’s prices compared to standard insurance rates and encourages drivers to drive more safely.
Five different factors are used to determine the safety score in question: the number of forced Autopilot disengagements, harsh braking, forceful turning, and forward-collision alerts per 1,000 miles. Based on the conduct of the driver, user safety ratings might move up or down, starting at 90 out of 100. The conventional vehicle insurance industry’s utilization of variables like age and credit score is also not included in this model.
The simplicity of Tesla’s insurance approach, which is derived from the safety score that can be calculated based on real-time driving, is one of its benefits. The present vehicle insurance system is inefficient, as Musk described in a recent interview with All-In.
At a recent event called All-In Summit Miami, which Musk attended through an internet Livestream, he said that the auto insurance system is “very inefficient.” “There are so many intermediary parties, from insurance brokers to the ultimate reinsurer, and each one takes a share,” said the speaker.
Only Arizona, Colorado, Illinois, Ohio, Oregon, Texas, and Virginia now provide insurance services from Tesla, while California is the only state where the company does not use real-time driving data.
According to Tesla CFO Zachary Kirkhorn, who is widely believed to have been the project’s impassioned catalyst, the automaker’s insurance quickly rose to the position of the second-largest insurer in Texas upon entering the state. Tesla now only provides insurance services in eight states, but before going global, coverage is anticipated to encompass at least 80% of the U.S.
Only time will tell how Tesla’s insurance policies will really impact motorist safety, particularly when they spread to a large portion of the rest of the United States. But given that drivers are now used to utilizing the Tesla mobile app and the company’s complete ecosystem, it’s probable that new customers will make heavy use of it in the years to come. The motivation for policyholders to drive safely in exchange for cheaper premiums is insurmountable.