Tesla Has a Bold New Plan for Car Insurance
Tesla definitely has its share of fans. You may be one of them. Yet, the idea of getting
car insurancefor one of those vehicles might be giving you anxiety.
After all, the premiums you pay for a luxury car, like a Tesla, could be expensive without doing some shopping around first. A bold new plan is underway from Elon Musk and Tesla to provide insurance through the company itself, possibly setting a
new car insurance paradigm.
What's the latest news on this, and what might it portend for your own car insurance needs? It's still a good idea to shop smarter for insurance.
Tesla insurance is already underway in California
Musk's recent declaration to create insurance specifically for Tesla cars started recently in California where owners of his cars are already buying in. According to
Forbes, Musk predicts Tesla will go wider into the car insurance industry soon, possibly making up 30% to 40% of its business.
This could make waves, including Musk's move to expand his insurance beyond California. Whether he'll succeed is another thing. In the above Forbes report on this story, it's said Musk is looking to expand his insurance to three other states: Illinois, Texas and Washington.
Their goal is to make the insurance a nationwide policy that could soon compete with the big players like Nationwide and State Farm. It might also attract those who prefer to get their car insurance through a pay-as-you-drive system.
While some insurance companies already offer this, Musk wants to apply this type of insurance only to those who buy Teslas.
Will people accept usage-based insurance on cars?
The popularity of Tesla is well-noted through recent sales statistics.
Cars.comnotes Tesla had 24,237 new-car registrations at the beginning of this year alone.
With that, the reports of Musk's insurance supposedly saving Tesla owners up to 30% in costs from competitors looks attractive. What might initially attract some customers is Musk's usage-based insurance concept.
He wants his Tesla owners to only pay premiums based on their past driving records rather than a set rate. To make the metrics more accurate, premiums are being set based on the connected technology in the Tesla cars, including driver-assist.
Musk's premiums might really stay low since those who only drive occasionally would get major discounts. Plus, buying the insurance would go much quicker using Tesla's digital tech. Underwriting, ratings, and claims are all done through automation right in the car, bringing significant innovation.
What is the future of Tesla insurance?
Tesla's intention is to make their insurance a national option soon. It all depends on whether they can overcome regulatory challenges in different states.
It might take years before we see Tesla insurance truly dominate the marketplace. In the meantime, many other usage-based insurance companies are out there, albeit sometimes having higher premiums than Tesla has promised.
Names like Progressive and
Metromileare two of their competitors in that category. So the question is, if you own a Tesla, should you jump into the Tesla insurance fray, or do a little more shopping around?
Shopping smartly for your car insurance
No matter which type of car you drive, you can shop smarter for insurance by using
Jerry. We're here to help find the insurance really right for you based on detailed criteria.
While Tesla might become a major player eventually, you may be able to find a policy better suiting the type of car you drive. Simply use our intuitive app to find what you need.